Elizabeth Holmes Is Sentenced to More Than 11 Years for Theranos Fraud

Exaggeration and hype are common among tech start-ups, but very few executives are indicted on fraud charges, let alone convicted and sent to prison. That trend may be changing as the Justice Department has said it plans to be more aggressive in its pursuit of white-collar criminals.

In October, Trevor Milton, the founder of the electric vehicle company Nikola, was convicted of fraud. And Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX, which collapsed in bankruptcy last week, is under multiple state and federal investigations.

In court on Friday, Judge Davila asked if any victims of Ms. Holmes were present. A man in a blue suit stood up and introduced himself as Alex Shultz, the son of George Shultz, the former secretary of state who served on Theranos’s board and who died in 2021, and the father of Tyler Shultz, a Theranos employee who helped expose the fraud.

His voice shaking, Alex Shultz described how Ms. Holmes had nearly “desecrated” his family after she suspected Tyler Shultz of speaking to the media about Theranos. She hired private investigators to stalk them, threatened legal ruin and “took advantage of my dad,” Alex Shultz said.

Jeffrey Schenk, an assistant U.S. attorney and a lead prosecutor, criticized Ms. Holmes’s argument that Theranos’s failure was typical of a high-risk, ambitious Silicon Valley start-up. “It is a logical fallacy to suggest that start-ups fail, Theranos was a start-up, and, therefore, Theranos failed because it was a start-up,” he said. “That is not true.”

Article source: https://www.nytimes.com/2022/11/18/technology/elizabeth-holmes-sentence-theranos.html