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File - Former Theranos Chief Executive Officer Elizabeth Holmes arrives in federal court, with her father Christian Holmes IV (left) and Billy Evans, on Monday, October 17, 2022, in San Jose. Elizabeth Holmes is preparing to report to prison in the next few days. The criminal case that exposed the blood-testing fraud at the core of her Theranos company has entered its final phase.
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FILE – Elizabeth Holmes, the former CEO of Theranos speaks at the Fortune Global Forum in San Francisco on November 2, 2015. The criminal case that exposed the blood-testing fraud at the core of Theranos is now in its final stages as Holmes prepares to go to prison.
SAN JOSE (Calif.) (AP). As Elizabeth Holmes prepares for her prison report next week, the criminal trial that exposed the blood-testing fraud at the core of Theranos is entering its final stage.
The 11-year sentence is a punishment for the woman who, despite being surrounded by 'tech bros', broke through to become Silicon Valley's most celebrated entrepreneur. She was then exposed as a fraud. Holmes was a victim of the shameless hype that is often associated with startup culture.
Even the federal judge who presided her trial was confused by her intentions. Holmes' defenders ask if the punishment is appropriate.
She is most likely to be known as Silicon Valley's Icarus, a fiery entrepreneur with a reckless ambition who ended up being convicted of fraud and conspiracy.
Her motives are still somewhat mysterious, and some supporters say federal prosecutors targeted her unfairly in their zeal to bring down one of the most prominent practitioners of fake-it-til-you-make-it -- the tech sector's brand of self-promotion that sometimes veers into exaggeration and blatant lies to raise money.
Holmes will start to pay for her deceit when she begins her sentence on May 30, which will separate her and her two children - a son, whose birth in July 2021 delayed the beginning of her trial, and a daughter born three months after her conviction.
She will be held in Bryan, Texas about 160 km (100 miles) north of Houston, her hometown. The judge who sentenced Holmes recommended the prison, but officials have not made it public where she will be housed.
Many of her critics believe she should be sent to prison for peddling technology she boasted could quickly scan for hundreds diseases and other problems using a few drops taken from a finger prick.
The technology did not work as promised. Theranos' tests were incredibly unreliable and could have even endangered the lives of patients. This is one of many reasons that she should be prosecuted.
Before these lies were exposed in
A series of explosive articles appeared in The Wall Street Journal
In October 2015, Holmes began raising nearly $1 billion in investment from a group of investors that included media mogul Rupert Murdoch and Oracle co-founder Larry Ellison. The duping of these investors led to Holmes' prison sentence and $452 million in restitution.
At one point, Holmes' stake at Theranos boosted her wealth on paper to $4.5 billion. She never sold her shares in the company. However, the evidence at trial showed that she enjoyed the fame and fortune of the company.
Trial evidence supporting Holmes's claim that she was engaged in an elaborate scam to stop the Journal from publishing its investigation was a strong support for this theory. John Carreyrou, the reporter who wrote those explosive stories, was forced to attend court in order to be in Holmes' field of vision as she testified.
Holmes approved surveillance to intimidate Theranos workers who discovered flaws in the technology used for blood testing. Tyler Shultz was one of the whistleblowers, the grandson to former Secretary of State George Shultz. Holmes convinced him to join Theranos' board.
Alex Shultz, Tyler's father, said that Tyler Shultz was so unnerved at Holmes' attempts to silence him, he started sleeping with a blade under his pillow.
Holmes' supporters continue to maintain that she had always good intentions, and was unfairly blamed by the Justice Department. She used the same overblown promotion techniques as other tech executives including Elon Musk who has made false statements about Tesla's self driving cars.
Some supporters claim that Holmes was singled-out because she briefly eclipsed men in Silicon Valley, and that the trial made her look like a modern version of Hester Prynne, the heroine in 1850's novel "The Scarlet Letter."
Holmes maintained her innocence throughout seven riveting days of testimony. People lined up at midnight to get one of the dozen seats in the San Jose courtroom.
Holmes recalled a memorable day when she said that the trauma of having been raped at Stanford University had never left her. She described a pattern of abuse that lasted for years, including emotional and sexual abuse, by Ramesh "Sunny" Balwani, her former lover, and Theranos conspiracy member.
Jeffrey Coopersmith, the lawyer for Balwani, denied these allegations at trial. Coopersmith tried unsuccessfully to portray his client, Balwani, as Holmes' pawn in the subsequent Balwani trial.
Balwani is serving a 13-year sentence in prison for fraud and conspiracy.
The U.S. district judge Edward Davila was as confused as anyone as to why the pregnant Holmes acted as she did in November when he handed down her sentence.
Davila complained, "This is a fraud where a great venture was launched with high hopes and expectations, only to have them dashed because of untruths, lies, hubris, and plain lies." Holmes stood in front of him. I suppose we take a step back, look at the case and ask ourselves: What is fraud?
The judge also recalled the days when Silicon Valley was mainly orchards farmed primarily by immigrants. This was before the land became a part of the tech boom in 1939, when William Hewlett & David Packard established a company in Palo Alto, the same city as Theranos.
Davila told the courtroom in rapt attention, "You will remember the great innovation of these two individuals in their small garage." No exotic cars or extravagant lifestyles, just the desire to create something for the benefit of society through hard work. This, I hope, will be the story and legacy of Silicon Valley.
Michael Liedtke, who has covered Silicon Valley for The Associated Press since 1993, is a veteran journalist.