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Fraud: Elizabeth Holmes Set To Report To Prison

Theranos founder, Elizabeth Holmes is set to report to prison on Tuesday, capping off a stunning downfall for the disgraced founder of failed blood testing startup Theranos.

Holmes was sentenced to more than 11 years in prison last November, after she was convicted months earlier on multiple charges of defrauding investors while running the now-defunct startup.

Her request to remain free on bail while she fights to overturn her conviction was denied by an appellate court earlier this month. Judge Edward Davila, who presided over her trial, ordered Holmes to turn herself in to the Bureau of Prisons by May 30 to begin serving her sentence.

Holmes is expected to serve out her sentence at Federal Prison Camp Bryan in southern Texas, a minimum security federal prison camp that is approximately 100 miles from Houston, where she grew up before moving to California to attend Stanford.

Her ex-boyfriend and former Theranos COO Ramesh “Sunny” Balwani was also convicted of fraud, and reported to prison in California last month to begin serving out his sentence.

Holmes was once an icon in the tech world, serving as a posterchild for the limitless ambitions and potential of Silicon Valley. Now, she and Balwani are the rare tech executives tried for, and convicted on, fraud charges.

Holmes dropped out of Stanford at the age of 19 to focus full-time on Theranos, a startup that claimed to have invented technology that could accurately test for a range of conditions using just a few drops of blood. Theranos raised $945 million from an impressive list of investors and was valued at some $9 billion at its peak – making Holmes a paper billionaire. She graced magazine covers and engaged in public speaking events wearing a black turtleneck that invited comparisons to the late Apple CEO Steve Jobs.

Her company began to unravel after a Wall Street Journal investigation in 2015 reported that Theranos had only ever performed roughly a dozen of the hundreds of tests it offered using its proprietary technology, and with questionable accuracy. It also came to light that Theranos was relying on third-party manufactured devices from traditional blood testing companies rather than its own technology.

Theranos ultimately dissolved in September 2018.

Holmes and Balwani were first indicted together nearly five years ago on the same 12 criminal charges. Their trials were severed after Holmes indicated she intended to accuse Balwani of sexually, emotionally and psychologically abusing her throughout their decade-long relationship, which coincided with her time running the company. (Balwani’s attorneys have denied her claims.)

This month, Davila ordered Holmes and Balwani to pay restitution of roughly $452 million to victims of their crimes.

Before her sentencing was announced in November, a tearful Holmes spoke to the court in San Jose, California.

“I loved Theranos. It was my life’s work,” she said. “The people I tried to get involved with Theranos were the people I loved and respected the most. I am devastated by my failings.”

She went on to apologize to the employees, investors and patients of Theranos.

“I’m so, so sorry. I gave everything I had to build our company and to save our company,” she said. “I regret my failings with every cell in my body.”

CNN

 

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