Elizabeth Holmes sentenced to 11 years in Theranos fraud case
The disgraced inventor was convicted in January of four counts of fraud for misleading investors about Theranos' technology and finances
Aux News Elizabeth Holmes
After being convicted on four counts of fraud in January, disgraced Theranos founder Elizabeth Holmes has been sentenced to more than 11 years in prison, The New York Times reports. The tech mogul, once hailed as the next Steve Jobs, faced up to 20 years in prison on charges that Theranos misled investors about its technology and finances.
Holmes founded Theranos in 2003, while still a student at Stanford University. The blood-testing company made its name (and eventual peak net worth of nearly $9 billion) on a technology called the Edison machine.
Theranos purported that the Edison could perform hundreds of blood tests via a single finger prick. This wasn’t true. A 2015 report from The Wall Street Journal found that Theranos merely repurposed existing technology to test smaller blood samples—far from the complete industry rejuvenation Holmes promised.
Holmes pleaded not guilty to the charges, which were first brought back in 2018. In his closing arguments, lead prosecutor Jeff Schenk said that Holmes “chose fraud over business failure.”
“She chose to be dishonest,” Schenk asserted, per NBC News. “That choice was not only callous; it was criminal.”
Much of Holmes’ defense centered around her business and romantic partner, Rami Balwani, who served at one time as Theranos’ president and CEO. Holmes alleged that Balwani lied to her about the company’s finances and subjected her to intimate partner abuse. Balwani was convicted of fraud in July, and is set to be sentenced December 7.
Holmes’ story was memorably chronicled last year in Hulu’s limited series The Dropout. In the series, Amanda Seyfried portrayed Holmes and won an Emmy for her work.
72 Comments
This seems like a long time. But I’m not particularly knowledgeable about the facts of the case, so whatever. One thing of which I am quite sure: this woman will serve the time she serves, and learn NOTHING.
She’ll go to prison, do her time and be forgotten. Then she’ll “write” a book and go on tour to take advantage of whatever notoriety she still has because of the successful Hulu series. That tour will be short-lived, as people will soon realize real-life Holmes isn’t nearly as interesting as Seyfried’s version.
Not sure going on tour 11-12 years after a show comes out to capitilize on its success is the most sound publicity stunt.
It’s still better than the Theranos stunt was. People don’t usually end up in prison from book tours.
Yep, she’ll take the Michael Milken approach, leveraging his “mistake” into a lesson she can impart to others. For money, of course.
Oh yes. There will be speaking fees.
But her voice!
It doesn’t matter what she learns or what she doesn’t. She’s out of the game forever. Or, at least she’s out of the game on the major-league level. She’ll write a memoir and go back to the minor leagues of selling snake oil.
I can see her selling medical devices on HSN.
I don’t know. She might learn to knit.
She’ll convince people she can knit and make a fortune on bespoke scarves that she’s actually buying from Nordstrom Rack.
Like John Spartan!
Do they still make license plates in prison?
Good for her!Listening to Bad Blood: The Final Chapter and hearing a) how gung ho Holmes was about following through with these scams even when a greedy fuck of Balwani’s caliber was saying they should stop, b) how her brilliant idea to get a permanent meal ticket with the US military was shutdown twice by two separate dudes who did the revolutionary thing of asking questions about the product and c) the amount of borderline Wile E. Coyote bullshit they tried to pull, thinking it will work was some prime entertainment. I can’t recommend that shit enough, some of the stuff on the way to this mess was so dumb that if this was a movie script, you would say it’s too unrealistic.I still don’t know if Holmes was a legitimate grifter from the start, a genuine idiot who got way in over her head, someone who morphed from one to the other or just both at the same time and I don’t think I’ll never know. I don’t think I wanna know, too.
I’m really gullible but I work in medicine so even I knew from the outset this was dodgy and would have asked at a minimum for verified comparisons of Theranos tests versus regular pathology testing on the same samples in order to see that it actually worked. Independently too because I know they were fiddling stuff like that as well.
When I saw her the first time, I guess it was on 60 Minutes, I was creeped out from almost the second she appeared. The weird voice, the unblinking, I said to my now former GF, “You wait and see, she’s some sort of con artist!”. She disagreed with me, if she had better radar about people, she probably wouldn’t have married both of her now ex-husbands.
This whole affair has provoked some nice bonding with my mom, who was a lab tech for 40 years. We’ve gossed about it from day one, and my mom, though no venture capitalist, was gobsmacked that anyone could fall for Holmes’s scam. She could tell in five minutes that Holmes full of shit. Because there are some tests that simply, physically cannot be done via the way Holmes said they were. You can’t, for example, get a potassium level from a pinprick, because the very mode of obtain the sample causes a potassium spike. You need a venipuncture. Same for determining clotting factors. It was clear to her that Holmes did not even know the basics of a field that she publicly claimed to have revolutionized. Pinprick blood testing is the goal of every lab diagnostics company. It’s the moonshot, the Everest and the four minute mile all rolled up in one. It may yet happen, but people spend whole careers just to advance the technology a little bit. That Holmes seemed to think she could Steve Jobs her way to something in a few years what others have sought to do over generations was at best hubris, and at worst, proof that Holmes never believed in her own tech, and was a fraud from day one.
Holmes went to a college professor with the initial idea, and the professor told her it was 100% impossible because of the sample size. But that didn’t stop our Liz!!
I’m guessing narcissistic personality disorder with a dash of sociopathy thrown in for good measure. She seems to fit most of the criteria for NPD. It’s possible she started out with good intentions, fueled by the narcissist’s tendency toward grandiosity and superiority. She may genuinely have believed that she could pull it off. Then when she couldn’t, the other aspects of NPD—the parts where the person is unable to accept criticism or defeat—helped her sink deeper and deeper into her grift.
narcissistic personality disorder with a dash of sociopathy This is redundant because sociopathic/psychopathic behaviors are part of narcissistic personality disorder. Also sociopathy/psychopathy isn’t used anymore professionally; it’s antisocial personality disorder. APD is a cluster B personality disorder, as it NPD.
Thank you. There’s a hilarious impulse on the internet (and in real life) to toss off psycho jargon from the 70s and 80s in a weirdly authoritative tone. It’s especially funny because mental health specialists literally publish an exhaustive explanation of their terminology every few years.
Except given that the DSM changes in accord with current social and political trends (things thought to be “disorders” are suddenly not when it becomes politically embarrassing rather than by any new scientific research), it’s not like the public *ought* to pay it any attention. Nor should the professionals.
Yeah, the term “sociopath” is definitely outdated because of political action by people with antisocial personality disorder.
more like, Katmandon’t
She reminds me strongly of someone I went to school with. His name was Andrey Hicks. In school he was the wunderkind. Taking advanced classes, and charming everyone with his big dreams. His mother thought he could do no wrong. Once, they even had the whole school assemble so Andrey and his mother could tell everyone about how they had endured rampant racism and discriminations (they were persons of color). It was incredibly bizarre. He set off all kinds of red flags, like a Ted Bundy kind of guy, and I thought at best he’d be a con artist, and at worst, a serial killer.Turns out I was right, and luckily, it was the former. He went to Harvard, dropped out, claimed he had a degree in mathematics, and set up a hedge fund based on a revolutionary algorithm he claimed to have invented. He got millions invested in the fund, and even managed to worm his way into the Kardashian’s inner circle. But it was all bogus. The money was going into a bank account and he was using it as piggy bank. he got found out and did three years in prison. He’s stayed out of trouble since then, but I’m convinced it’s because he’s not been caught yet. People like Holmes and Hicks never go straight. It’s always on to the next grift. I guarantee you when Holmes it out, she’ll start peddling supplements through an MLM, or peddle a memoir and hit the public speaking circuit like Jordan Belfort did.
Holmes will no doubt be back. And she will be bankrolled, as it seems like she’s latched onto a multi-millionaire. Her partner/father of her kids is the heir to a California hotel chain. His whole family seems to have fallen under her spell. Her partner’s dad went to several days of the trial “disguised” as a disinterested Holmes supporter named Hanson and tried to chat up the media and sway them to her side. Several reporters picked up Hanson’s weirdness, and then he showed up at the courthouse one day as Holmes partner’s father: https://www.npr.org/2021/09/14/1036835868/elizabeth-holmes-trial-hotelier-bill-evans-goes-incognitoShe’s going to milk that family for all it’s worth.
She’s not an idiot. She displayed some degree of brilliance in the past. I fully believe she started out trying to actually accomplish what she said she was going to accomplish. But when it became obvious that she couldn’t do it, she had grown so addicted to everybody calling her a genius and throwing money at her – not to mention being publicly feted by some of the richest and most powerful people on earth – she literally could not make herself believe that she blew it. There was no way she could accept the notion, so she turned the entire thing into a juggling routine, convincing herself it would all come together “soon.” That said, she’s lucky nobody died because of her bullshit, she became a delusional bully, and she deserves every single one of those eleven years. I hope she’s miserable the entire time- giving birth in prison should be a special bonus.
There was no way she could accept the notion, so she turned the entire thing into a juggling routine, convincing herself it would all come together “soon.”I think you might be right on the money there, considering how many companies and start-ups operate on that notion. This isn’t the same but I keep thinking about video game companies having blatantly unsustainable practices that they cover up with bullshit like “everyone is their own producer” or “BioWare magic” because it somehow worked out the previous 5 times, until it inevitably doesn’t and almost tanks everything or leads to people fucking off en masse.
That said, she’s lucky nobody died because of her bullshitI mean, Ian Gibbons did, kind of. The tech itself didn’t kill him, but Holmes’ lies and magical thinking is definitely responsible for his worsening mental state and eventual suicide.
Her Stanford professor, played by Lori Metcalf in The Dropout, looked at her design and told her on the spot it couldn’t work. People who worked in biotech were highly skeptical from day one, but she pulled investments from people without the science background to question the tech.What was always amazing to me was that she got Walgreen’s to sign up to put their machines in every branch despite never being able to prove the machines worked at all.
Yeah, I highly recommend this podcast too, it’s fascinating and has more details about just how fucked up the whole thing was. It’s amazing that Balwani turned out to be the saner part of that scam, which is telling something about Holmes.The worst part in all of this, that pushes it from hilarious Silicon Valley shenanigans to scary and dangerous fraud, is that Holmes decided to use her “inventions” on actual patients. She was endangering people. As to what she was – I think she deluded herself into thinking that “fake it till you make it” would work in her case, where she basically had to make scientific and engineering breakthroughs that are currently impossible (which she didn’t know because she had all of a semester and half of engineering education). She thought that by throwing enough money at any problem will solve it, and you can’t invent an FTL drive or a teleportation device or a machine that does 1000 tests on a single small drop of blood by throwing a few billions at the problem.
I’ve mentioned this before in these discussions, but while listening to some really left-leaning podcasts last year it was genuinely shocking running into the hosts/guests just chuckling away Holmes’s actions as to them it was just another Silicon Valley rich person con. It is so deeply frustrating as not only do these kinds of things always have victims who were not rich, but especially in her case the absolute devastation and horrific consequences her actions had. And it’s not like it is hidden as a lot of the details are quite public and Bad Blood is a genuinely excellent book I’ve ever read on scams like this. Whenever I loaned to a friend to read, they basically the same reaction as me as they just got angrier with each chapter. I’ll have the podcast if it has even more information.For Holmes situation is really intriguing not just because of the levels of her actions, but also because in many ways it reflects how we try to simplify these kinds of events to fit in how we want to perceive things instead of how they are. Sorry about the tangent there.
Bad Blood: The Final Chapter has the information and details that came out during the trial, after the book came out. If you thought the book was excellent (it really was, I loved it), you’ll love the podcast.
Bad Blood is right up there with Empire of Pain in terms of benchmark nonfiction writing about pharmaceuticals and biotech. Both Carreyrou and Patrick Radden Keefe are incredible writers and researchers.
What really struck me reading Bad Blood is how quickly the whole thing fell apart when someone who wasn’t an old rich white guy got involved.
Yup, it’s insane. And it wasn’t some regular old rich white guys – Henry Kissinger was there, you’d think an ancient amoral psycho of his pedigree would smell that something stinks.
He’d probably just think it was the bodies from the secret Christmas bombings.
Her genius was recruiting rich old white guys as investors and board members who had exactly zero experience in biotech. But people heard George Shultz and assumed the enterprise was legit. She leveraged one relationship into the next, using people who were so protective of their reputations that they couldn’t admit they were wrong. She did get early funding from Draper Fisher Jurvetson, one of the top VCs in the country, but you’ll notice they never upped for the later rounds despite vocal support for Theranos and Holmes.
I think she was a legitimate grifter from the start who got way in over her head and, as some sort of sick and desperate defense mechanism, continued to perpetuate the lie in hopes they might still believe her.I know a woman like this, used to getting her way, always full of shit. Everyone knows it and even when it’s as clear as day and impossible to deny that she’s full of shit, she shrugs her shoulders and doubles down rather that simply admit when she’s wrong.She has those same deer-caught-in-the-headlights eyes, looking at you like “I don’t know what you’re talking about.”She’s like Marie Schrader from Breaking Bad.
There must’ve been some kind of screw loose. A grifter, fantastist, and sociopath all in one. In a way she has more features than an Edison machine.
My mum was saying the person who owns the house next door to us in Sri Lanka ended up being a rare case of someone going to jail for fraud over there but it was low security and he still somehow squirrelled away a fortune (and a few other houses) which he then bragged about having on release (probably used some of that money to get such favourable jail conditions). Our other neighbour is a Buddhist temple. There’s a lesson in there somewhere but I don’t know what it is.
I don’t know much but I have the sense I want your life.
That is the most fascinating combination of seemingly unrelated and largely irrelevant facts that I’ve come across in a while. It’s like the Santaram of AV Club.
A decade from now I will here her name on the news, struggle to remember why it feels familiar and go back to forgetting her again.[shrugs]
It always seems like white collar crimes are very hard to prosecute and have rather lenient penalties when compared to ‘regular’ crimes… unless you commit one that pisses off a whole lot of rich people. Holmes gets 11 years, Bernie Madoff got 150 years – one of these crypto guys is probably going to be frozen in carbonite.
Just don’t let these crypto guys know you’re about to freeze them in carbonite, or you may need extra storage space for their hardons.
At least he should be quite well protected.
If he survived the freezing process, that is.
I think that’s the punishment for a robot killing a human, actually. Let’s ask Old Gus. He’ll know.
Calling her an “inventor” is being very generous.
Yeah, especially in an article about how she’s being sent to jail for 11 years precisely for not inventing the product she claimed to invent.
Next you’ll be saying I don’t get to call myself an Academy Award winner because of that time I broke into Tom Hanks’ house.
I wonder how many years Caroline Ellison and her crew will eventually get?
Probably not much. The whole Crypto scam is unregulated, isn’t it? Theranos was under the SEC and had fraudulent statements. FTX didn’t actually defraud anyone as they didn’t guarantee deposits.Maybe they get them, but it’s going to be hard to show fraud versus incompetence.
Googling her name introduced me to the phrase “Chinese harem,” so apparently her punishment has already begun.
It’s kind of weird that you chose to only name Caroline Ellison in a responsibility question regarding the FTX/Alameda mess.
She’s being allowed to give birth before reporting to prison on April 1. It’s great to be White!
Let’s see how much she serves.
Its a federal case right? Criminals convicted of federal crimes, usually have to serve the full sentence. There’s no get out early on ”good behavior” policy.
There is now. Trump signed it in 2018.
Good to know.
The Feds don’t fuck around. They don’t let people out early because the state pen is filling up. She may not do 11, but I doubt it’s 2-3 either.
i don’t mind that she fleeced stupid, rich people but she endangered people’s lives during the trials her company ran. she should be locked up for much longer but at least she got some jail time.
IIRC there were at least a couple of people who died of illnesses the machines failed to detect.
Somewhat related, I was listening to the Plain English podcast on the FTX collapse and Sam Bankman-Fried, and one of the really revelatory parts for me there was how directly the host compared SBF to Holmes. How they both played up on these myths about being brilliant outsiders who represented something different while also wearing that difference as an uniform.While there are naturally differences between the two, some quite critical, for me they are both born from very similar sources and highlight perhaps more than any other similar crisis about the fundamental issues in the system that allows them to rise to these heights. It will also be really interesting to see if SBF faces similar repercussions for his actions.
Cool, how about this weeks movies?
But … but … she’s white, blonde and attractive! How can this be???
I think you can put blonde in scare quotes.
Why is this in the AV Club!?
Oh. That’s too bad.
This story has always fascinated me because I work in finance and the typical due diligence for investing in or buying a company is usually the full proctological. Deals fall apart all the time simply because a company can’t produce requested data. The default position is always skepticism. The fact that there were no milestones required by the investors to fund subsequent rounds – over the course of FIFTEEN YEARS – absolutely defies all logic.