As Elizabeth Holmes heads to jail for fraud, questions stay about her motives

SAN JOSE, Calif. — As Elizabeth Holmes prepares to report back to jail subsequent week, the prison case that laid naked the blood-testing rip-off on the coronary heart of her Theranos startup is getting into its ultimate section.

The 11-year sentence represents a comeuppance for the wide-eyed girl who broke by way of “tech bro” tradition to turn out to be one among Silicon Valley’s most celebrated entrepreneurs, solely to be uncovered as a fraud. Alongside the way in which, Holmes grew to become an emblem of the shameless hyperbole that always saturates startup tradition.

However questions nonetheless linger about her true intentions — so many who even the federal decide who presided over her trial appeared mystified. And Holmes’ defenders proceed to ask whether or not the punishment matches the crime.

At 39, she appears most definitely to be remembered as Silicon Valley’s Icarus — a high-flying entrepreneur burning with reckless ambition whose odyssey culminated in convictions for fraud and conspiracy.

Her motives are nonetheless considerably mysterious, and a few supporters say federal prosecutors focused her unfairly of their zeal to deliver down probably the most distinguished practitioners of fake-it-til-you-make-it — the tech sector’s model of self-promotion that typically veers into exaggeration and blatant lies to boost cash.

Holmes will start to pay the worth for her deceit on Might 30 when she is scheduled start the sentence that can separate her from her two youngsters — a son whose July 2021 beginning delayed the beginning of her trial and a 3-month-old daughter conceived after her conviction.

She is predicted to be incarcerated in Bryan, Texas, about 100 miles (160 km) northwest of her hometown of Houston. The jail was beneficial by the decide who sentenced Holmes, however authorities haven’t publicly disclosed the place she shall be held.

Her many detractors contend she deserves to be in jail for peddling a expertise that she repeatedly boasted would shortly scan for a whole lot of illnesses and different well being issues with just a few drops of blood taken with a finger prick.

The expertise by no means labored as promised. As an alternative, Theranos assessments produced wildly unreliable outcomes that would have endangered sufferers’ lives — probably the most ceaselessly cited the reason why she deserved to be prosecuted.

Earlier than these lies had been uncovered in a collection of explosive articles in The Wall Avenue Journal starting in October 2015, Holmes raised almost $1 billion from a listing of savvy traders together with Oracle co-founder Larry Ellison and media mogul Rupert Murdoch. It was the duping of these traders that led to her jail sentence and a $452 million restitution invoice.

Holmes’ stake in Theranos at one level catapulted her paper wealth to $4.5 billion. She by no means offered any of her inventory within the firm, although trial proof left little doubt she reveled within the trappings of fame and fortune — a lot in order that she and the daddy of her youngsters, William “Billy” Evans, lived on a palatial Silicon Valley property throughout the trial.

The idea that Holmes was working an elaborate rip-off was buttressed by trial proof documenting her efforts to forestall the Journal’s investigation from being printed. That marketing campaign compelled John Carreyrou — the reporter liable for these bombshell tales — to attend court docket and place himself in Holmes’ line of imaginative and prescient when she took the witness stand.

Holmes additionally signed off on surveillance aimed toward intimidating Theranos staff who helped uncover the issues with the blood-testing expertise. The whistleblowers included Tyler Shultz, the grandson of former Secretary of State George Shultz, whom Holmes befriended and persuaded to affix the Theranos board.

Tyler Shultz grew to become so unnerved by Holmes’ efforts to close him up that he started sleeping with a knife below his pillow, in accordance with a wrenching assertion delivered by his father, Alex, at her sentencing.

Holmes’ supporters nonetheless contend she all the time had good intentions and was unfairly scapegoated by the Justice Division. They insist she merely deployed the identical over-the-top promotion techniques as many different tech executives, together with Elon Musk, who has repeatedly made deceptive statements concerning the capabilities of Tesla’s self-driving vehicles.

In response to these supporters, Holmes was singled out as a result of she was a lady who briefly eclipsed the boys who usually indulge in Silicon Valley’s highlight, and the trial turned her right into a latter-day model of Hester Prynne — the protagonist within the 1850 novel “The Scarlet Letter.”

Holmes steadfastly maintained her innocence throughout seven often-riveting days of testimony in her personal protection — a spectacle that induced folks to line up shortly after midnight to safe one of many few dozen seats out there within the San Jose courtroom.

On one memorable day, Holmes recounted how she had by no means gotten over the trauma of being raped whereas enrolled at Stanford College. She then described being subjected to a long-running sample of emotional and sexual abuse by her former lover and Theranos conspirator, Ramesh “Sunny” Balwani, and advised his stifling management blurred her pondering.

Balwani’s lawyer, Jeffrey Coopersmith, denied these allegations throughout the trial. In Balwani’s subsequent trial, Coopersmith unsuccessfully tried to depict his shopper as Holmes’ pawn.

Balwani, 57, is now serving an almost 13-year jail sentence for fraud and conspiracy.

When it got here time to condemn the then-pregnant Holmes in November, U.S. District Choose Edward Davila appeared as puzzled as anybody about why she did what she did.

”It is a fraud case the place an thrilling enterprise went ahead with nice expectations and hope, solely to be dashed by untruth, misrepresentations, hubris and plain lies,” Davila lamented whereas Holmes stood earlier than him. “I suppose we step again and we take a look at this, and we expect what’s the pathology of fraud?”

The decide additionally hearkened again to the times that Silicon Valley consisted principally of orchards farmed by immigrants. That was earlier than the land was ceded to the tech growth starting in 1939 when William Hewlett and David Packard based an organization bearing their surnames in a one-car storage in Palo Alto — the identical metropolis the place Theranos was primarily based.

“You’ll recall the fantastic innovation of these two people in that small storage,” Davila reminded everybody within the rapt courtroom. “No unique vehicles or lavish life-style, only a need to create for society’s profit by way of sincere laborious work. And that, I might hope, can be the persevering with story, the legacy and follow of Silicon Valley.”


Michael Liedtke has been masking Silicon Valley for The Related Press for 23 years.


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