What can money buy you? Rings? Bracelets? Chains?
Indeed, they can all be purchased, but we’re not here to talk about these expensive embellishments.
We’re here to discuss the story of the woman who took almost a billion dollars in investors’ money and bought chains to last herself more than a decade.
Medical? Manacle.
On Friday (18 November), Elizabeth Holmes, the founder and former CEO of failed medical startup firm Theranos was found guilty of wire fraud and has been sentenced to 11 years and three months in prison.
Once Upon a Time
The start dates back to 2003. 19-year old Elizabeth Holmes had founded her own company and it was an immediate hit.
The company’s name was Theranos.
Theranos promised that its Edison test could detect medical conditions with just a few drops of a patient’s blood. In other words, they could completely eliminate the troublesome procedure of x-ray scans and needle-poking from medical testing.
Everyone in Silicon Valley was shook and investments poured in instantaneously.
They raised nearly US$1 billion (~S$1.3 billion) without having to prove that the technology worked.
In 2014, the company peaked. Then 30-year-old Elizabeth Holmes was a founder of a company valued at US$9 billion (~S$12 billion). She supposedly revolutionised the medical industry in terms of disease diagnosing.
The company was big, but was supported by a foundation of lies. They had falsified testing reports and rigged their data to beautify their presentation.
In 2015, the stilts of lies slowly gave way and the seams came apart.
Holmes was exposed as a fraud.
The technology Holmes touted were but fiction and the company collapsed within a few years.
Holmes’ Trial
In January 2022, the Stanford University drop-out was convicted by a jury in California on four counts of fraud, each of which carries a maximum sentence of 20 years imprisonment.
During the hearing, Holmes teared up while giving her testimony.
“I stand before you taking responsibility for Theranos. It was my life’s work. I am devastated by my failings. I have felt deep pain for what people went through, because I failed them. To investors, patients, I am sorry. I regret my failings with every cell of my body,” Holmes admitted.
The defendant and her team argued for a maximum of 18 months sentence behind bars. Unfortunately that was not the case.
US District Court Judge Edward Davila announced the sentencing Friday after the four-hour-long hearing.
Holmes would be sentenced to nearly a dozen years in prison, followed by three years of supervised release.
As for how much money she owes to investors, the court will be determining that at a later date.
When the sentence dropped, the court fell silent and tears streamed down Holmes’ cheeks. She hugged her family goodbye and was escorted away.
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The Significance of The Case
First and foremost, the most obvious point of significance is the sheer amount of money raised. It’s not easy to raise nearly a billion dollars. Yes, it’s billion with a b.
Better yet, it was done purely through deception and trickery. This makes her possibly the largest fraud in the entire world.
Next, the attention and fame she has garnered. In her original success, she was hailed as a wunderkind CEO, a visionary founder, and the first self-made female tech billionaire. As if that wasn’t enough, Hulu made a TV series about her named The Dropout.
Wow.
Lastly, it was mind blowing how she managed to keep up with this act for almost 20 years. She was 19 when she began and 38 when she was convicted.
Not a bad run.
Unfortunately, all good things have to come to an end. As they say, honesty is the best policy. Holmes wasn’t honest then, and the policies have come back to haunt her now.
Yikes.
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