Theranos founder Elizabeth Holmes must report to prison by May 30
The once-reputable CEO’s reputation began to unravel more than six years ago when a media investigation revealed that Theranos — which claimed to be able to run a series of tests from just a few drops of blood — was using traditional lab machines from other companies to complete many of the tests. Former employees said the technology was inconsistent and didn’t work nearly as well as Theranos advertised to doctors and investors.
Holmes went from being seen as a young leader in Silicon Valley to the disgraced subject of a best-selling book, several podcasts, an HBO documentary and a Hulu TV series.
Holmes, who started Theranos while still a student at Stanford, is appealing her fraud conviction, a process that could take months or years. She petitioned a judge to allow her to remain free while the appeal winds its way through the court system, but Davila, who heard her original case and sentenced her, denied the petition. In April, Holmes appealed Davila’s decision in a last-ditch effort to stay out of jail, but Tuesday’s decision by the appeals court meant Holmes only delayed her reporting date by about a month.
Holmes’ former business partner, Sunny Balwani, was convicted in a separate but similar trial of 12 counts of conspiracy to commit wire fraud and wire fraud. He was sentenced to nearly 13 years in prison and began his incarceration on April 20 at a federal correctional institution in San Pedro, California.
After Theranos finally shut down in 2018, amid several regulatory and media investigations, Holmes kept a low profile until her months-long trial attracted widespread media and public attention in late 2021. The former CEO was convicted of misleading investors about the company’s abilities. Theranos raised about $900 million from investors, including prominent technology leaders and US political figures.
Investors included Oracle co-founder Larry Ellison, media executives Rupert Murdoch and the Cox family, and the family of former Education Secretary Betsy DeVos. Holmes also attracted prominent statesmen such as Henry Kissinger and Jim Mattis to her board.
Mattis later testified at her trial and said he would have had a different view of the company if he had known some of the limitations of the Theranos blood testing device.
“That would have dampened my enthusiasm significantly,” he said in response to a prosecutor’s question about the use of third-party devices.
Her story has become emblematic in some circles of apparent greed and a “growth at any cost” mindset in Silicon Valley. But members of the tech community have tried to distance themselves from Holmes and Theranos, which they often see as an outsider.
Holmes has two young children, including one born before her trial and another born after her sentencing. Davila has previously recommended that she serve time in a federal prison camp in Bryan, Tex., about 100 miles outside of Houston.
In an April court filing for her appeal, Holmes’ attorneys argue that her 135-month sentence is “excessive” and the result of miscalculations during federal sentencing.
“This court should reverse the conviction or, at a minimum, remand for recidivism,” the document states.
