Theranos founder Elizabeth Holmes jailed for 11 years for fraud

 (Getty Images)
(Getty Images)

Theranos founder Elizabeth Holmes has been jailed for 11 years for defrauding investors.

The 38-year-old was convicted of investor fraud and one count of conspiracy in January and was handed a 135-month jail sentence at a Californian court on Friday.

Ms Holmes had said Theranos had developed a test to diagnose hundreds of diseases with just a few drops of blood, claims which were later proved false.

She arrived at the court in San Jose on Friday for her sentencing hearing holding hands with her husband Billy Evans. The pair have a 12-month-old son and Ms Holmes is also pregnant.

Prosecutor John Bostic told the jury about Holme’ striking response when told by a consultant with a major US pharmacy chain that the blood tests could be inaccurate and she could go to jail.

She allegedly said: “They don’t put attractive people like me in jail.”

At its peak, Theranos employed more than 800 people and was valued at $9billion (£8billion), with Holmes having a personal fortune of $4.5 billion (£4 billion), but after the Wall Street Journal raised questions about the reliability of the blood tests, it quickly collapsed.

The maximum sentence she faced was 20 years in prison, but prosecutors had asked for a 15-year term, and $804million (£675million) in restitution to go towards the £840million sum Theranos raised from investors in 2013 and 2014. Holmes requested no more than 18 months in prison and community service.

Judge Edward Davila said he would set a separate hearing for restitution in the future.

“This is a fraud case where an exciting venture went forward with great expectations only to be dashed by untruths, misrepresentations, plain hubris and lies,” the judge said.

Holmes captivated Silicon Valley by claiming to have developed a machine called the Edison that would take a single drop of blood which could be used to detect everything from STDs to cancer. It was a breakthrough because conventional blood tests require significantly more blood and multiple tests have to be run.

Holmes’ lawyers claimed she was manipulated by Ramesh ‘Sunny’ Balwani, who was the Theranos president and chief operating officer who she was also dating.

Balwani, 57, was found guilty of two counts of conspiracy and ten counts of wire fraud in a separate trial and faces 20 years in jail. He accused Holmes of manipulating him.