Elizabeth Holmes says she can’t afford $250 payments to Theranos victims
Lawyers for disgraced entrepreneur Elizabeth Holmes said this week that she would not be able to afford to pay $250 a month to victims of her failed blood-testing startup, Theranos, after leaving prison.
Mrs. Holmes, 39, began an 11-year, three-month prison sentence in Texas in May after she was found guilty last year of four counts of fraud and conspiracy to defraud investors about her company’s technology and business dealings.
Last month, a federal judge in California ordered Holmes and her former business partner, Ramesh Balwani, to pay $452 million in restitution to defrauded investors, including media mogul Rupert Murdoch.
Federal prosecutors last week asked the U.S. District Court for the Northern District of California to correct “clerical errors” in court records. One of the proposed fixes would require Ms. Holmes, as part of her restitution, will pay either $250 or at least 10 percent of her earnings, whichever is greater, each month after she is released from prison.
Mrs. Holmes’ lawyers objected to that proposed change in a filing on Monday, saying the court had substantial evidence showing she had “limited financial resources.”
Her lawyers also contested the government’s argument that the change would fit with the payment schedule for Balwani, who was tried separately and is serving a nearly 13-year sentence on fraud charges. He must pay at least $1,000 per month after he is released from prison, according to court records.
Mrs. Holmes and Mr. Balwani have appealed their cases.
Mrs. Holmes’ lawyers argued that it was appropriate that the two had been treated differently in sentencing. “There is no indication in the record that the absence of a change in schedule after her release was a clerical error,” the filing said.
Lawyers representing Ms. Holmes and the U.S. government did not immediately respond to a request for comment Thursday.
Other entities listed as victims for restitution purposes include RDV Corporation, an investment firm representing Michigan’s wealthy DeVos family, which invested $100 million in Theranos, and several investment vehicles linked to Don Lucas, a Silicon Valley venture capitalist who died in 2019.
Mrs. Holmes raised $945 million for Theranos, a company she founded in 2003 after dropping out of Stanford University. She promised that the company would revolutionize healthcare with tests that could detect a range of ailments with just a few drops of blood. But the claims were settled after a 2015 investigation by The Wall Street Journal revealed that the blood-testing technology was not working. Theranos was dissolved in 2018.
