Explained | Why was former Theranos CEO Elizabeth Holmes given 11 years in prison?

Her blood-testing startup claimed to revolutionise testing by detecting hundreds of medical conditions from just a few drops of blood 

The story so far: More than three years after the winding up of her failed blood-testing startup Theranos, once-Silicon Valley star Elizabeth Holmes, 38, was sentenced to over 11 years in prison by a United States District Court last week for defrauding investors of her firm, which had promised to revolutionise blood-testing technology. Federal prosecutor Robert Leach described the Theranos scam as one of the most egregious white-collar crimes ever committed in Silicon Valley. District Judge Edward Davila did not grant the leniency in sentencing requested by the lawyers of Ms. Holmes, mother to a one-year-old son and currently pregnant with another child.

In 2003, Ms. Holmes, 19 at the time, was in her first year at Stanford University’s School of Chemical Engineering and dropped out to start Theranos, which was initially called Real-Time Cures. Her first idea was to develop an arm patch that could scan wearers for infectious diseases and release antibiotics for the same but the product never materialised.

According to the BBC, the former CEO belonged to a well-off home in Washington DC and her parents worked as bureaucrats in Capitol Hill. Those who knew her as an adolescent described her as a polite but withdrawn kid. In a letter to her father, Ms. Holmes, nine at the time, wrote about wanting to discover something “mankind didn’t know was possible to do”.

Soon after dropping out of Stanford, Ms. Holmes began dating software engineer Sunny Balwani, who is 20 years older than her. Mr. Balwani would go on to become a Theranos investor, COO and eventually an accomplice in her crimes. During her testimony in the trial, Ms. Holmes said she was sexually and emotionally abused by Mr. Balwani during the course of their relationship.

After being established, Theranos ran its operations in secrecy for a decade before beginning to publicise its blood-testing technology in 2013. The Theranos website said that its technology could detect more than 200 medical conditions that included cholesterol, thyroid, herpes, and even cancer in just about 15 minutes, using a testing device called Edison to analyse just a few drops of blood collected in a tiny vial called the nanocontainer through a finger prick. The idea for the firm’s supposedly revolutionary testing technology was rooted in Ms. Holmes’ often publicly acknowledged phobia of the needles used for drawing blood for lab tests, which she believed made many patients reluctant to get tested.

The first Theranos tests hit the market at the end of 2013 when it established several testing centres inside Walgreens drugstores.

It was around this time that Silicon Valley witnessed the dramatic but short-lived rise of Ms. Holmes. Her promise of having discovered a never-before-achieved technology raked in powerful investors and board members and her company was valued at a cool $9 billion at the time, with her own stake being $4.5 billion. In 2011, the former U.S. Secretary of State George Shultz joined the Theranos board. In the years that followed, a lot of people with government experience joined the board, including former Secretary of Defence William Perry, former Secretary of State Henry Kissinger, and four-star General James Mattis, who later became Secretary of Defence. Ms. Holmes also got the backing of media mogul Rupert Murdoch and one of America’s richest families, the Waltons.