Elizabeth Holmes, the founder of Theranos, has been sentenced to more than 11 years in prison for defrauding investors in her blood-testing start-up, which was valued at $9bn.
The former Silicon Valley star falsely claimed that the technology could diagnose the disease with just a few drops of blood.
Holmes, 38, who is pregnant, tearfully told the court she felt “deep pain” for those misled by the scam.
Holmes was convicted last January after a three-month trial.
Holmes is expected to appeal Friday’s ruling in a California court.
The ruling is widely seen as a test of how seriously the justice system takes corporate fraud in the technology sector.
Holmes, who was previously hailed as the “successor to Steve Jobs”, was the world’s youngest self-made billionaire.
Holmes launched Theranos after dropping out of Stanford University at age 19, and its value skyrocketed after the company claimed it could revolutionize disease diagnosis.
But the technology that Holmes promoted did not work, and it is mired in lawsuits, and the company was dissolved by 2018.
Prosecutors said during Holmes’ trial in California that it knowingly misled doctors and patients about Theranos’ flagship product, the Edison machine, which the company claimed could detect cancer, diabetes and other conditions using just a few drops of blood.
Holmes was also accused of providing a vastly exaggerated picture of the company’s performance to its financial backers.
Juries ultimately found her guilty of four counts of fraud, with a maximum penalty of 20 years in prison. However, they found her not guilty on four other counts, and failed to reach a verdict on three other counts.
Before Judge Edward Davila issued his ruling on Friday, Holmes read a letter in court in which she tearfully apologized to investors and patients.
“I was devastated by my failures,” she said. “I felt deep pain for what people had gone through, because I had let them down.”
Referring to Holmes as a “brilliant” entrepreneur, the judge told her, “Failure is normal. But failure by fraud is not acceptable.”
Holmes must now turn herself in to begin serving her sentence on April 27.
Holmes and Ramesh “Sunny” Balwani, her former business partner and lover, were charged in 2018 with fraud and conspiracy to commit wire fraud. Balwani, who was tried separately, was convicted of fraud this summer. He will issue a ruling on his case next month.
Prosecutors have asked Holmes to be sentenced to 15 years in prison and to pay about $800 million in damages to investors, including several high-profile figures such as former US Secretary of Defense James Mattis, who testified against her at trial, and software tycoon Larry Ellison.
But Holmes’ defense team, who claimed she was well-intentioned and trying to help people, said she should serve 18 months under house arrest.
The judge found on Friday that it had already caused $121 million in losses to investors, including Rupert Murdoch, the family that owns Walmart and the CEO of Wells Fargo. The amount she will be required to pay will be determined at a later court hearing.
More than 130 friends, family and former Theranos employees have written to the judge to appeal their clemency plea.
Among those calling for a light sentence was 2020 presidential candidate and Democratic New Jersey Senator Cory Booker, who wrote that Holmes “for all her mistakes, made the world a better place”.
The group notices that Holmes is a young mother. She gave birth to a child in July 2021 and is currently pregnant with her second child.
It is not known when she was born. It is expected that her lawyers will try to prevent her going to prison until after the birth.
If she has to give birth in prison, there are two residential programs offered by the Federal Department of Prisons, according to Mercury News.
However, neither of them are located in California. The facilities allow mothers to live with their children in prison for up to 30 months.
Her partner Billy Evans told the judge, in his sentencing note to the court, that he feared “a future in which my son and his mother will grow up on the other side of the glass armed by guards”.
Prisoners’ families are thoroughly searched before limited visits to their children allow physical contact. Prisoners have to wait in long lines and pay exorbitant fees to contact family members by phone.
Eileen Libera, who works as a secretary in Silicon Valley and lost a large chunk of her savings by investing in Theranos, told the BBC she was “happy” with the ruling.
“I think that’s fair given all the facts of the case,” she added. “I knew it was fraud, and I put people’s lives at risk.”