Theranos founder Elizabeth Homes has been sentenced to more than 11 years in prison for defrauding investors of the blood-testing startup.
Holmes, who plans on appealing, will not have to report for her 135-month prison sentence until next Spring (April), the judge announced during the hearing.
“I am devastated by my failings,” Holmes said in a tearful courtroom apology. She is currently pregnant with her second child. “I have felt deep pain for what people went through because I failed them.”
Prosecutors had asked Judge Edward Davila to sentence Holmes to 15 years in prison and that she pay $800m in restitution for her role in the company’s fraudulent claims.
Holmes’ lawyers cast her as a scapegoat who overcame a toxic relationship with Theranos COO Ramesh “Sunny” Balwani after Holmes was convicted in January of three felony counts of wire fraud and one felony count of conspiracy to commit fraud.
Judge Davila said he would schedule a restitution hearing to determine how much Holmes must repay at a later date.
Miranda Welbourne Eleazar is an assistant professor of management and entrepreneurship at the Tippie College of Business and is an expert in business ethics, particularly entrepreneurs. She’s been asking entrepreneurs how they effectively balance innovation with ethical decision-making, a little-studied area of entrepreneurialism, especially when compared to the well-studied failures of corporate ethics.
Welbourne said it’s sometimes hard for entrepreneurs to even see ethical dilemmas because their business becomes a part of their identity, which can cloud their vision. In interviews with entrepreneurs and investors as part of her study, she has found that entrepreneurs are often aware of the ethical challenges they face and must balance the trade-off between behaving in a completely ethical manner with potential harm to the new venture due to the nature of entrepreneurship.
She found that an entrepreneur’s response to ethical dilemmas is case-dependent. Various pressures related to entrepreneurship as well as individual entrepreneurial characteristics affect how they perceive where to draw the line between what is ethical and acceptable behavior and what is unethical and unacceptable.