Federal prosecutors have asked a judge to sentence disgraced Theranos CE0 Elizabeth Holmes to 15 years in prison, arguing she deserves a lengthy prison sentence because her massive scheme duped investors out of hundreds of millions of dollars by convincing them mistakenly that his company had developed a revolutionary blood testing device.
Calling the case “one of the most significant white-collar crimes Silicon Valley or any other district has ever seen,” prosecutors vehemently rejected the defense attorneys’ characterization that Holmes had been wrongfully victimized, by partly because of the media coverage.
Holmes is due to appear for sentencing Nov. 18 in federal court in San Jose, Calif., nearly a year after she was found guilty of three counts of wire fraud and one count of conspiracy in view to committing fraud. She faces up to 20 years in prison on each count.
“She repeatedly chose lies, hype, and the prospect of billions of dollars over patient safety and fair investor relations,” Assistant U.S. Attorney Robert S. Leach wrote in a 46-year memoir. pages filed Friday. “Elizabeth Holmes’ crimes weren’t failing, they were lying – lying in the most serious context, where everyone needed her to tell the truth.”
Holmes’ lawyers filed an 82-page document late Thursday calling for a lenient sentence of no more than 18 months, saying her reputation had been permanently destroyed, turning her into a “caricature to be mocked and reviled”.
Along with asking that Holmes receive a lengthy prison sentence, prosecutors have asked the 38-year-old to pay $803,840,309 in restitution for her role in the year-long scheme that turned her into one of the most respected and wealthy entrepreneurs in Silicon Valley and the United States.
“It fed on the hopes of its investors that a dynamic young entrepreneur had changed health care. She leveraged the credibility of her illustrious board of directors,” Leach wrote. “And, through her deception, she achieved spectacular fame, adoration, and billions of dollars in wealth.”
Leach also pointed out how, after Wall Street Journal reporter John Carreyrou exposed the scheme, Holmes “attacked him and his sources” and desperately tried to shift the blame to others.
“At trial, she blamed her COO (and her longtime boyfriend), her board of directors, her scientists, her business partners, her investors, her marketing company, her lawyers, the media – everyone but herself,” Leach wrote.
The company’s former chief operating officer, Ramesh “Sunny” Balwani, 57, was found guilty of 12 counts of investor and patient fraud in July in a separate trial. He is expected to be sentenced on December 7.
And Leach wrote that the health of actual patients was endangered by what Holmes had done.
“As the money ran out she went to market with an unproven and unreliable medical device,” he wrote. “When her lead trial developer quit when Theranos launched, she coldly told the scientist, ‘she has a promise to deliver to the customer, she really has no choice but to go for it. forward with the launch. “”
Holmes’ attorneys have argued that if U.S. District Judge Edward Davila decides to send her to jail, she deserves a lenient sentence because she poses no danger to the public and has no criminal history.
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