(Reuters) — A California judge sentenced Theranos founder Elizabeth Holmes to 11 years and three months in prison for defrauding investors in her now-defunct blood-testing startup that was once valued at $9 billion.
United States District Judge Edward Davila in San Jose, California, sentenced Ms. Holmes for three counts of investor fraud and one count of conspiracy. A jury convicted Ms. Holmes, 38, in January after a trial that spanned three months.
The judge set Ms Holmes’ surrender date for April. Her lawyers are expected to ask the judge to let her remain free on bail during her appeal.
Assistant U.S. Attorney Jeff Schenk told the judge before handing down the sentence that a 15-year sentence would be “making a statement that the ends do not justify the means.”
But Ms Holmes’ lawyer Kevin Downey urged leniency for Ms Holmes at the hearing, saying that unlike someone who committed a “major crime” she was not motivated by greed.
Mrs. Holmes had asked in court papers for a more lenient sentence of 18 months at home, followed by community service, urging the judge not to make her a “martyr to public passion.”
Prosecutors said during the trial that Ms. Holmes misrepresented Therano’s technology and financials, including by claiming that its miniaturized blood testing machine could run a multitude of tests from a few drops of blood. The company secretly relied on conventional machines from other companies to run patient tests, prosecutors said.
Before she was sentenced, prosecutors had said a 15-year sentence was necessary to deter Holmes and others from fraud.
Her crimes “damaged the trust and integrity” that Silicon Valley’s startup economy relies on, they said.
The federal Bureau of Corrections had recommended a nine-year prison sentence, according to court papers.
Once valued at $9 billion, Theranos Inc. promised to revolutionize how patients receive diagnoses by replacing traditional labs with tiny machines meant to be used in homes, pharmacies and even on the battlefield.
Forbes dubbed Ms. Holmes became the world’s youngest female self-made billionaire in 2014, when she was 30 and her stake in Theranos was worth $4.5 billion.
But the startup collapsed after a series of Wall Street Journal articles in 2015 questioned its technology.
During the trial, prosecutors said that Ms. Holmes engaged in fraud by lying to investors about Therano’s technology and finances rather than allow the company to fail.
Ms Holmes testified in her own defence, saying she believed her statements were accurate at the time.
Although she was convicted on four counts, Ms. Holmes on four other counts, claiming she defrauded patients who paid for Theranos tests.