Elizabeth Holmes, once celebrated as the visionary founder of the health technology company Theranos, will remain in incarceration following a decision by a federal appeals court on Monday which declined to overturn her conviction on fraud charges. The court ruled her claims insufficient to prove any legal errors were made during her trial in which she was found guilty of misleading investors about her company’s capabilities.
In San Francisco, a three-judge panel upheld the fraud convictions of Holmes and her former partner and collaborator, Ramesh “Sunny” Balwani, asserting that both must adhere to a court ruling ordering the repayment of $452 million to those defrauded.
Acting as CEO throughout Theranos’ decade and a half saga, Holmes purported that her company had invented a ground-breaking medical device capable of diagnosing a host of ailments from a few drops of blood. However, the devices failed to work as promised, rendering her assertions fraudulent.
Now 41, Holmes began her 11-year prison term in May 2023 at a Texas federal penitentiary. According to the Federal Bureau of Prisons, her anticipated release is slated for March 19, 2032. Balwani, who is 59, received a near 13-year sentence in California and is expected to be released in 2033.
The pair argued in their appeal that their 2022 trials were marred by judicial errors, citing the court’s decision to admit certain testimonies, such as that of an ex-Theranos employee, and to exclude others. However, Judge Jacqueline Nguyen dismissed these arguments in a 54-page judgment, indicating the absence of judicial wrongdoing or significant errors by the trial court.
No immediate comments were made by the defense attorneys for Holmes and Balwani concerning the court’s decision.
Holmes’ rise was meteoric, with her face gracing business magazine covers and likenings made to technology giants like Steve Jobs. The company amassed nearly $1 billion in investments from influential figures like Larry Ellison, Rupert Murdoch, and the Walton family of Walmart fame, alongside several other investors.
While gathering capital, Holmes enlisted a formidable board of directors, including former Defense Secretary James Mattis, who testified against her during her trial, and former Secretaries of State Henry Kissinger and the late George Shultz. In court, George Shultz’s son, Alexander, offered statements condemning Holmes’ elaborate deception that deceived his father.
The scheme unraveled in 2015 following an exposé by The Wall Street Journal and an ensuing regulatory examination that exposed critical flaws in Theranos’s technology, ultimately leading to its disintegration.
The dramatic Theranos saga, one of Silicon Valley’s most notorious scandals, has been explored through various mediums, including a book, an HBO documentary, and an acclaimed television series.
