11¼ Years

The judge sentenced disgraced Theranos founder Elizabeth Holmes to 135 months in prison, followed by 3 years of supervised release.

Given that people typically serve 85% of the sentence, that's about 9⅗ years incarcerated.

This is a good thing.  She knowingly engaged in fraudulent behavior, and remains, in her own words, proud of it.

It's good, because it provides a disincentive to the next bunco artist running a fraudulent Silicon Valley startup, and it's good because it puts the lie to Elizabeth Holmes belief that, "They don’t put pretty people like me in jail."

We need more pretty crooks like her put in jail.

If we aggressively pursued fraud in tech startups, we probably would not be seeing things like the FTX collapse.

Silicon Valley is openly and proudly fraudulent in its business practices, and it needs to held to account:

Disgraced Theranos chief Elizabeth Holmes was sentenced Friday to more than 11 years in prison for duping investors in the failed startup that promised to revolutionize blood testing but instead made her a symbol of Silicon Valley ambition that veered into deceit.

The sentence imposed by U.S. District Judge Edward Davila was shorter than the 15-year penalty requested by federal prosecutors but far tougher than the leniency her legal team had sought for Holmes, who has a year-old son and another child on the way.

Holmes, who was chief executive throughout the company’s turbulent 15-year history, was convicted in January in the scheme, which revolved around the company’s claims to have developed a medical device that could detect a multitude of diseases and conditions from a few drops of blood. But the technology never worked, and her claims were false.

………

The judge gave Holmes more than five months of freedom before she must report to prison on April 27. She gave birth to a son shortly before her trial started last year.

If Holmes’ pregnancy had a role in determining her sentence, the decision could prove controversial. A 2019 study found that more than 1,000 pregnant women entered federal or state prisons over a 12-month study period; 753 of them gave birth in custody.

………

Federal prosecutor Robert Leach described the Theranos scam as one of the most egregious white-collar crimes ever committed in Silicon Valley. Leach told the judge he has an opportunity to send a message that curbs the hubris and hyperbole unleashed by the tech boom of the last 30 years. 

Mr. Leach is wrong.  Theranos is not, "One of the most egregious white-collar crimes ever committed in Silicon Valley."  It's not even close to the top.

The difference was, that unlike software, which is fungible by nature, the laws of physics and chemistry made it clear that she was lying.

Here is hoping that we start seeing other tech executives frog marched out of their offices in handcuffs, and not just for fraud.  There is also criminal anti-competitive behavior (Zuckerberg, Pichai, Bezos), illegal price fixing (Schmidt, Jobs, etc.), privacy violations, and a host of other behaviors which, had they occurred in 1962 instead of 2022, would have resulted in arrests and jail time.

It's about time to apply justice equally.