BRYAN, Texas - The CEO of Theranos reported to federal prison in Bryan, Texas, on Tuesday, May 30. Elizabeth Holmes was convicted of defrauding investors in her blood-testing startup and was sentenced to 11 years.
At around 12:30 p.m., Elizabeth Holmes, in jeans and a light brown top, walked into the Federal Prison Camp in Bryan to begin serving her sentence.
In 2003, Elizabeth Holmes founded Theranos in Silicon Valley after dropping out of Stanford University when she was 19. Holmes claimed Theranos would revolutionize health care with a technology that could quickly detect diseases with a few drops of blood taken with a finger prick.
Investor poured money into this phenomenon, and in 2014, the company was valued at $4.5 billion, but it quickly dropped to a value of $0 when flaws in Theranos’ technology and diagnostics were exposed.
"You cannot lie and deceive. Instead, she wanted to double and triple down, perhaps because of the fear of failing. She was beginning to buy into the media from Jim Cramer and on the cover of Forbes, calling her the next Steve Jobs, so rather than admitting failure, she chose to double down and in so to answer, she began to lie," Prison Consultant and Founder of White Collar Advice Justin Paperny said.
In January 2022, a jury convicted Holmes on four felony counts of fraud and conspiracy and ordered her to pay half of $452 million in restitution to the victims.
Holmes filed a motion to stay out of prison on bail while she appealed her conviction, but it was denied. Holmes was sentenced to 11 years though it’s likely she won’t serve the full sentence.
"There’s also the First Step Act, which was passed in late 2018. Based on the length of her sentence, will earn her another year off her sentence. Then she’s eligible to get a year in a half-way house or home confinement. So, my estimate is that she’ll serve 7 ½ years in prison presuming she doesn’t get into any trouble," said Paperny.
Now in prison, Holmes leaves behind two young children, a son born a few weeks before the start of her trial and a daughter who was conceived after she was convicted.