Elizabeth Holmes must report to prison on May 30 and pay restitution
The last
Elizabeth Holmes, the disgraced founder of failed blood-testing start-up Theranos, who was convicted last year of defrauding investors of more than $100 million, has lost her last-ditch effort to stay out of jail as she appeals against her conviction.
Ms. Holmes, whose case cast a harsh light on the culture of pride in Silicon Valley, must report to jail on May 30, a judge ruled after the U.S. Court of Appeals for the Ninth Circuit rejected her attempt to stay free on bail on Tuesday.
Ms Holmes and her top lieutenant at Theranos, Ramesh Balwani, who was found guilty of fraud in a separate trial and who began serving his prison sentence last month, were also charged. ordered to pay $452 million in restitution to the victims of the company’s fraud.
Of that total, the judge, Edward J. Davila of the United States District Court for the Northern District of California, who oversaw both trials, ordered Ms. Holmes and Mr. Balwani to pay $125 million to media mogul Rupert Murdoch, who invested in in Teranos. Walgreens and Safeway, which had entered into business deals with the company, were also identified as victims for restitution purposes.
Why it matters: Mrs. Holmes’ conviction was the end of an era.
Theranos raised nearly $1 billion from investors for technology that the company says can test for a wide variety of diseases with just a few drops of a patient’s blood. After those claims turned out to be false, both Ms Holmes and Mr Balwani were charged with defrauding investors.
Their convictions and sentences — 11 years for Ms. Holmes, 13 for Mr. Balwani — have contributed to a sense in Silicon Valley that the era of the “fake it till you make it” approach may be coming to an end. Mrs. Holmes, who left Stanford to start the company, had a paper net worth of $4.5 billion and had celebrity backing. Her precipitous demise has been extensively documented in TV shows, podcasts and documentaries.
Background: A last-minute attempt to stay out of jail.
Ms Holmes is appealing her conviction, a process that delayed her prison start date, which was originally set for April 27. Last month, Judge Davila said refused a last-minute request from Mrs. Holmes to remain free pending her appeal.
Ms Holmes was convicted of four felonies last year for defrauding investors.
Mr. Balwani, who is also known as Sunny, was Mrs. Holmes’ closest professional associate and a one-time romantic partner. He was convicted in a trial last year of 10 counts of wire fraud and two counts of conspiracy to commit wire fraud, a sentence more severe than Mrs Holmes’s. His legal team has appealed against his conviction.
Now What: Mrs. Holmes is going to jail.
Ms. Holmes will surrender to authorities after Memorial Day weekend. She was originally ordered to report to Federal Prison Camp in Bryan, Texas. She lives in California with her partner, Billy Evans, and their two young children.