As Elizabeth Holmes goes to prison for fraud, her reasons remain unclear 2023

The Theranos blood-testing fraud case is nearing its conclusion as Elizabeth Holmes prepares to surrender to prison next week.

The wide-eyed lady who broke through “tech bro” culture to become one of Silicon Valley’s most recognized entrepreneurs was sentenced to 11 years for her deception. Holmes symbolized startup culture’s unabashed exaggeration.

The federal judge who presided over her trial was perplexed by her genuine motives. Holmes’ supporters question whether the sentence is appropriate.

She may be regarded as Silicon Valley’s Icarus a reckless entrepreneur convicted of fraud and conspiracy.

Her motives are unclear, and some supporters say federal prosecutors unfairly targeted her to bring down one of the tech sector’s most prominent fake-it-til-you-make-it practitioners, who sometimes exaggerate and lie to raise money.

Holmes will begin her sentence on May 30, which will separate her from her two children—a boy whose July 2021 birth delayed her trial and a 3-month-old girl born after her conviction.

Bryan, Texas, 100 miles (160 km) northwest of Houston, will house her. The judge who convicted Holmes suggested the jail, but authorities have not announced where she will be detained.

Her many enemies believe she should be imprisoned for selling a device that she said could swiftly scan for hundreds of illnesses and other health issues with a few drops of blood from a finger prick.

Technology failed. Instead, Theranos tests yielded very inaccurate findings that may have endangered patients’ lives, one of the main reasons she should be charged.

Holmes collected over $1 billion from smart investors including Oracle co-founder Larry Ellison and media magnate Rupert Murdoch before those falsehoods were exposed in a series of blockbuster Wall Street Journal articles in October 2015. Her jail term and $452 million compensation came from defrauding investors.

Holmes’ Theranos stock once made her $4.5 billion. She never sold her stake in the firm, but trial testimony showed she enjoyed fame and money, living on a lavish Silicon Valley mansion with her children’s father, William “Billy” Evans.

Trial evidence supporting Holmes’s complex deception was bolstered by her efforts to stop the Journal’s probe. That effort forced John Carreyrou, the reporter who broke those blockbuster articles, to attend court and be in Holmes’ line of sight as she testified.

Holmes authorized monitoring to intimidate Theranos workers who discovered the blood-testing technology’s problems. Holmes befriended Tyler Shultz, the grandson of former Secretary of State George Shultz, who became a whistleblower.

According to his father Alex’s heartbreaking speech during Holmes’ sentencing, Tyler Shultz began sleeping with a knife beneath his pillow after Holmes’ attempts to silence him.

Holmes’ supporters claim the Justice Department unfairly scapegoated her. They say she used the same over-the-top advertising strategies as many tech leaders, including Elon Musk, who has frequently misrepresented Tesla’s self-driving vehicle capabilities.

The trial converted Holmes into a modern-day Hester Prynne, the protagonist of the 1850 classic “The Scarlet Letter,” according to Holmes’ admirers.

Holmes’s seven compelling days of self-defense testimony drew crowds to the San Jose courtroom just after midnight.

Holmes told a story of being raped at Stanford University. She then said Ramesh “Sunny” Balwani, her ex-lover and Theranos conspirator, stifled her thought with emotional and sexual assault.

Jeffrey Coopersmith, Balwani’s lawyer, disputed the charges. Coopersmith failed to portray Balwani as Holmes’ pawn at his trial.

Balwani, 57, is serving nearly 13 years for fraud and conspiracy.

U.S. District Judge Edward Davila appeared as perplexed as anybody when he sentenced Holmes in November.

“This is a fraud case where an exciting venture went forward with great expectations and hope, only to be dashed by untruth, misrepresentations, hubris and plain lies,” Davila bemoaned while Holmes stood before him. “What is the pathology of fraud?”

The judge recalled Silicon Valley’s immigrant-farmed orchards. Before the tech boom began in 1939 when William Hewlett and David Packard launched a firm in a one-car garage in Palo Alto, where Theranos was situated, the property was relinquished.

“You’ll recall the wonderful innovation of those two individuals in that small garage,” Davila told the rapt courtroom. “No exotic cars or lavish lifestyle, just a desire to create for society through honest hard work. I hope that’s Silicon Valley’s legacy and practice.