Theranos founder Elizabeth Holmes was sentenced to 11 years in prison on Friday for the crime of three felony counts of wire fraud and one felony count of conspiracy to commit fraud.
"Failure is normal, but failure by fraud is not ok," Judge Edward Davila told the San Jose courtroom in handing down the sentence.
The sentence is most, but not all, of the 15 years prosecutors asked Judge Davila to sentence the pregnant Theranos founder and CEO to and none of the $800 million restitution they called for, although the latter could change. Davila said that a restitution hearing will be scheduled in the future, rather than today.
READ: Theranos founder Elizabeth Holmes found guilty of fraud
Holmes, 38, founded Theranos when she was 19 on the premise of a finger prick test that could detect diseases such as cancer and diabetes using very little blood. She and Theranos knowingly lied about the capabilities of the technology and racked up $945 million from investors along the way, including Rupert Murdoch, Betsy DeVos and the Walton family.
At the hearing, Judge Davila ruled the total loss in share value that could be attributed to Holmes's fraud is $121 million. Prosecutors had put that figure at $804 million, while Holmes’ lawyers argued $48 million. Davali noted that Theranos was a private company that none of its investors are likely to recover a return on their investments, according to reports.
Significantly, the judge also said that although Holmes led Theranos, she did not lead its criminal activity. That role was played by the company’s chief financial officer and Holmes’ ex-boyfriend Ramesh “Sunny” Balwani, he said.
Balwani was convicted in July of two counts of conspiracy and ten counts of wire fraud. He is set to be sentenced in December. Holmes has also previously testified that Balwani, 20 years her senior, sexually abused her.
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