Theranos founder Elizabeth Holmes will be sentenced for felony fraud October 17 instead of September 26, according to a notice from the federal court where she was convicted Jan. 3 of defrauding investors.
The clerk’s notice from U.S. District Court in San Jose provided no explanation for the delay.
Holmes, 38, was found guilty by a jury of bilking investors out of more than $144 million as she raised money for her purportedly revolutionary Palo Alto blood-testing startup. She gave birth to a son a year ago and remains free on a $500,000 bond.
Holmes was exonerated on charges of defrauding patients, but legal experts agree she will almost certainly go to prison, and that during her sentencing, Judge Edward Davila may consider the entirety of investors’ losses, which the federal government has alleged topped $700 million.
Each fraud count carries a potential 20-year prison sentence, but because of federal sentencing guidelines and judges’ discretion, maximum sentences are rarely imposed.
Davila, however, has put fraudsters behind bars for lengthy terms in cases involving major losses, including in seven local cases that saw sentences ranging from six months to 10 years over losses from $91,000 to nearly $50 million.
Legal experts believe Davila will consider the spectacular losses in the Theranos case and Holmes’ role as founder and leader of the company, but may temper his reckoning with consideration that the startup does not appear to have been a scam from the outset — federal prosecutors claimed she turned to crime when the firm ran into financial trouble — along with factoring in the well-being of her son.
Holmes’ case drew world-wide attention, with the courtroom packed with media and spectators throughout her four-month trial. The rise and fall of Theranos and its charismatic young founder and CEO has spawned two documentaries, a best-selling book, a TV series and an upcoming movie starring Jennifer Lawrence as Holmes.
Holmes, a Stanford University dropout who founded Theranos at age 19, claimed her machines could conduct a full range of tests on just a few drops of blood, but jurors in her trial heard that the technology was rife with problems. Investors, including representatives from some of America’s wealthiest families, testified that Holmes misled them with false claims that the machines were in use on U.S. military helicopters and that the technology was endorsed by major pharmaceutical companies. Holmes, when she took the witness stand in a dramatic and unexpected appearance, testified that she had pilfered pharmaceutical company logos and applied them to internal Theranos reports distributed to investors.
Theranos’ chief operating officer Sunny Balwani, with whom Holmes had a romantic relationship, was convicted earlier this month on 12 counts of defrauding investors and patients.
