The Department of Justice wants Theranos founder Elizabeth Holmes, 38, who made billions of dollars before she was ultimately convicted of wire fraud and conspiracy, to spend 15 years in prison rather than walk free.
Additionally, the DOJ wants Holmes to pay $800 million in restitution to investors who were defrauded.
“Considering the extensiveness of Holmes’ fraud… the sentencing of 180 months’ imprisonment would reflect the seriousness of the offenses, provide for just punishment for the offenses, and deter Holmes and others,” federal prosecutors stated.
Theranos Inc. claimed initially that it could use a few drops of blood to obtain results as far-ranging as cancer and cholesterol. “Investors have poured more than $400 million into Theranos, valuing it at $9 billion and her majority stake at more than half that, The Wall Street Journal reported in 2015.
By 2014, Holmes, worth $4.5 billion, was touted as the youngest self-made female billionaire. But In 2015, the Journal commenced writing about the company, finding that its claims were inaccurate. In January 2016, the Centers for Medicare and Medicaid Services charged Theranos with deficient practices that could jeopardize patients’ health.
Theranos soon closed its medical lab operations. In April 2017, over 175,000 people were awarded a full refund in a settlement that forced Theranos to pay $4.65 million into an Arizona state reimbursement fund.
“I wanted to make sure that every Arizonan who had paid for a test, whether or not it was accurate, would get a refund,” Attorney General Mark Brnovich stated.
In June 2018, federal prosecutors charged Holmes and her number two, Ramesh Balwani, with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. The trial was delayed twice, once for the COVID pandemic and another when Holmes told the court she was pregnant.
At her trial in November 2021, Holmes said she had not targeted former employees Tyler Shultz and Erika Cheung, who had given information to the Journal. But prosecutors displayed a letter sent to Cheung from a law firm threatening litigation if she confessed trade secrets, and indicated that someone confronted Shultz and urged him to sign legal papers.