Elizabeth Holmes, the founder of Theranos, a blood testing business that faced allegations of fraud and ultimately failed, is set to begin serving a sentence of more than 11 years in prison, starting on Tuesday.
In January 2022, Holmes was convicted of four counts of wire fraud, marking the end of a long journey that began in 2003 when she dropped out of Stanford University at the age of 19 to establish a company with the ambition of revolutionizing medical diagnostics using a small blood sample.
Over the next decade, Theranos became a favorite in Silicon Valley, reaching a peak valuation of over $9 billion. Prominent figures such as Rupert Murdoch, the Walton family (heirs to the Walmart empire), and US Education Secretary Betsy DeVos invested in the company.
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Theranos’ board of directors included notable individuals like former Defense Secretary James Mattis, two former senators, and former Secretaries of State Henry Kissinger and George Shultz.
However, revelations emerged, largely driven by journalist John Carreyrou of the Wall Street Journal, that cast doubt on the company’s technology and its ability to deliver accurate results. Theranos’ claims about its capabilities began to unravel.
Due to the pandemic, the trials for Holmes and her business partner, Balwani, were postponed until the fall of 2021. During her defense, Holmes claimed that Balwani had significant influence over her, an allegation that Balwani denied. Holmes also stated that she had no intention to deceive investors.
Despite rejecting most of her defenses, the jury found Holmes guilty. In the fall of 2022, both Holmes and Balwani were sentenced. Experts believe that Balwani’s previous experience in managing other companies contributed to his harsher sentence of nearly 13 years in prison.
In a recent New York Times profile, Holmes indicated she still harboured ambitions to build in the medical technology industry. “I still dream about being able to contribute in that space,” Holmes said. “I still feel the same calling to it as I always did and I still think the need is there.”
