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Former Theranos CEO Elizabeth Holmes loses bid to stay out of prison after fraud conviction

Former Theranos CEO Elizabeth Holmes leaves federal court in San Jose, California, March 17, 2023.
Former Theranos CEO Elizabeth Holmes leaves federal court in San Jose, California, March 17, 2023. Copyright Jeff Chiu/AP
Copyright Jeff Chiu/AP
By Associated Press
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The former CEO, who was convicted of defrauding investors after claiming her company would revolutionise healthcare, will now serve 11 years in jail.

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Disgraced former Theranos CEO Elizabeth Holmes has been rebuffed in her attempt to stay out of federal prison while she appeals her conviction for the fraud she committed while overseeing a blood-testing scam that exposed Silicon Valley’s dark side.

In an 11-page ruling issued late on Monday, US District Judge Edward Davila concluded there wasn't compelling enough evidence to allow Holmes to remain free on bail while her lawyers tried to persuade an appeals court that alleged misconduct during her four-month trial led to an unjust verdict.

The judge’s decision means Holmes, 39, will have to surrender to authorities April 27 to start the more than 11-year prison sentence Davila imposed in November.

The punishment came 10 months after a jury found her guilty on four counts of fraud and conspiracy against the Theranos investors who believed in her promises to revolutionise the healthcare industry.

Holmes had accompanied her lawyers to a San Jose, California, courtroom on March 17 to try to convince Davila that various missteps by federal prosecutors, and the omission of key evidence, would culminate in the Ninth Circuit Court of Appeals exonerating her.

Holmes' prison sentence is scheduled to start roughly 20 years after she dropped out of Stanford University when she was 19 years old to start Theranos in Palo Alto, California - the same city where William Hewlett and David Packard founded a company bearing their surnames in a small garage and planted the seeds of what grew into Silicon Valley.

Holmes could still file another appeal of Davila's latest ruling, a manoeuvre her co-conspirator at Theranos - Ramesh "Sunny" Balwani - successfully used to delay his scheduled March 16 date to begin a nearly 13-year prison sentence. 

But the Ninth Circuit Court of Appeals last week rejected that appeal, and Balwani is now scheduled to report to a Southern California prison on April 20.

The case that highlighted Silicon Valley greed

Davila has recommended Holmes serve her sentence in a Bryan, Texas, prison. It hasn’t yet been publicly confirmed if that will be the facility where she reports.

Unless she can find a way to stay free, Holmes will be separated from the two children she had leading up to the trial and after her conviction.

Her first child, a boy, was born shortly before her trial began in September 2021. The youngest child, whose gender hasn’t been disclosed in court documents, was born at some point after her November sentencing. 

She conceived both with her current partner, William "Billy" Evans, whom she met after breaking up with Balwani in the midst of Theranos' downfall.

The denial of Holmes' request to remain free is the latest twist in a long-running saga that has already been the subject of an acclaimed HBO documentary and an award-winning Hulu TV series.

Although they had separate trials, Holmes and Balwani were accused of essentially the same crimes centred on a ruse touting Theranos’ blood-testing system as a breakthrough in health care. 

The claims helped the company become a Silicon Valley sensation that raised nearly $1 billion (€915 million) from investors and at one point anointed Holmes with a $4.5 billion (€4.1 billion) fortune, based on her 50 per cent stake in Theranos.

Holmes also parlayed the buzz surrounding Theranos to speaking engagements on the same stage as former US president Bill Clinton and glowing cover stories in business publications that likened her to tech visionaries such as Apple co-founder Steve Jobs.

But Theranos’ technology never came close to working like Holmes and Balwani boasted, resulting in the company’s scandalous collapse and a criminal case that shined a bright light on Silicon Valley greed and hubris.

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