- A court denied Theranos founder Elizabeth Holmes’ request to stay home while she appeals her conviction.
- Holmes was convicted of four counts of wire fraud and conspiracy to commit wire fraud in 2022.
- Holmes was set to start a 11-year prison sentence in April, but this was delayed as she appealed her conviction.
A court has ruled that Theranos founder Elizabeth Holmes has to go to prison, denying her request to stay home while she appeals her conviction.
The US Court of Appeals for the Ninth Circuit said Tuesday that Holmes hadn’t shown that the appeal raised a “substantial question” of law or fact that is “fairly debatable,” or that even if it did it likely wouldn’t lead to a reversal of the verdict, a new trial, or a different sentence.
Holmes was convicted of four counts of an 11-count indictment in January 2022 related to her blood-testing startup Theranos, including wire fraud and conspiracy to commit wire fraud.
Holmes had asked Judge Edward J. Davila, US district judge for the Northern District of California, to let her stay out of prison while she appeals her conviction. Davila denied her request, and Holmes since appealed this decision.
Separately, Davila also ordered Holmes and former Theranos COO Sunny Balwani to pay $452 million in restitution to “the victims of their fraud conspiracy,” including Rupert Murdoch, Walgreens, and Safeway.
Holmes founded Theranos in 2003, aged 19, while at Stanford, and dropped out of her chemical engineering course to work on the startup full-time. The company, which was valued at $9 billion at its peak, developed a test that could detect a variety of health conditions using blood from a single finger prick.
But in 2015, a bombshell Wall Street Journal article alleged that Theranos’ blood-testing machine couldn’t give accurate results and that the company was instead running its samples through the same machines used by other blood-testing companies.
Theranos ended up becoming the focus of multiple investigations – including by the FDA and SEC – and regulators from the Centers for Medicare and Medicaid Services said there were major inaccuracies in its tests. Holmes was banned from working in the lab-testing industry for two years and Theranos shut its lab operations and wellness centers in 2016.
In March 2018, Theranos, Holmes, and Balwani were charged with “massive fraud” by the SEC. Holmes agreed to pay a $500,000 fine and return 18.9 million shares of Theranos stock.
In June 2018, Holmes stepped down as CEO and the Department of Justice charged her and Balwani with nine counts of wire fraud and two counts of conspiracy to commit wire fraud. Later that year, Theranos told shareholders that the company was shutting down.
Holmes’ trial started in September 2021 and lasted around four months, with testimonies from witnesses including former Theranos employees, investors, patients, and doctors. In January 2022, the jury returned a mixed verdict, finding Holmes guilty on three counts of wire fraud and one count of conspiracy to commit wire fraud and not guilty on four other counts. They failed to reach a verdict on the remaining counts.
In November 2022, Holmes was sentenced to 135 months in prison with three years of supervised release set to begin on April 27, 2023. But Holmes appealed Davila’s decision to deny her request to remain out of prison while she appeals her conviction, and her reporting date was delayed while the court considered her appeal.
In her appeal in April, Holmes’ attorneys wrote that her conviction “resulted from prejudicial errors that warrant reversal and a new trial,” and argued that the court’s denial of Holmes’ release pending appeal “reflects numerous, inexplicable errors.”