Elizabeth Holmes to Report to Prison at the End of April After Losing Bid to Remain Free

Former Theranos CEO Elizabeth Holmes leaves federal court in San Jose, Calif., on March 17, 2023. (Jeff Chiu/AP Photo)

A U.S. judge on April 10 denied Theranos founder Elizabeth Holmes’ request to remain free on bail while she appeals her conviction on charges of defrauding investors in the failed blood-testing startup that was once valued at $9 billion.

A jury ruled Holmes guilty of three counts of wire fraud and one count of conspiracy to commit wire fraud in January 2022. Prosecutors in the case said she misled investors about the success of her blood-testing technology from her company Theranos.

U.S. District Judge Edward Davila sentenced Holmes to 11 years and three months in prison in November. Holmes asked Davila to postpone the sentence while the 9th U.S. Circuit Court of Appeals reviews her case.

Theranos founder and CEO Elizabeth Holmes (C), walks into federal court in San Jose, Calif., on Nov. 18, 2022. (Nic Coury/AP Photo)

Davila concluded that even if Holmes won her appeal to challenge the Theranos technology evidence, it wouldn’t result in a reversal or a new trial for all the counts of which she was found guilty.

“Contrary to her suggestion that accuracy and reliability were central issues to her convictions, Ms. Holmes’s misrepresentations to Theranos investors involved more than just whether Theranos technology worked as promised,” he said.

The U.S. District Court of Northern California ruled that while Holmes is not seen as a danger to the community or a flight risk, she has not successfully presented new evidence (pdf).

Holmes Appeals Conviction

In her appeal, Holmes argued she did not promote a faulty product, though the court ruled “these disputes do not directly pertain to the conduct for which Ms. Holmes was convicted.”

Holmes, who recently gave birth to her second child, had also argued that she should remain free to care for her newborn baby.

“Ms. Holmes had also made several misrepresentations ... such as those regarding the company’s financial status, reliance on third-party and commercially available devices, partnership with Walgreens, and validation by pharmaceutical companies,” the court’s opinion said.

Holmes had previously booked a one-way flight to Mexico and was accused by prosecutors of attempting to flee the country, according to court documents (pdf).

Her attorneys called the claims “baseless,” saying she had booked the trip with her husband prior to the verdict with the hope she would be found not guilty and be able to attend a wedding.

Referring to the planned Mexico trip in his order on Monday, Davila said the booking had been “ill-advised.”

“Booking international travel plans for a criminal defendant in anticipation of a complete defense victory is a bold move, and the failure to promptly cancel those plans after a guilty verdict is a perilously careless oversight,” Davila said. “Certainly, this incident has invited greater scrutiny of Ms. Holmes’s personal affairs and further speculation into her motivations.”

But Davila acknowledged that after reviewing her attorneys’ communications from the time in question, it appeared she was telling the truth about the trip.

“The Court accepts Ms. Holmes’s representation that the one-way flight ticket—while ill-advised—was not an attempt to flee the country,” Davila said.

Faulty Technology

Holmes, 39, founded Theranos in 2003 when she was an undergraduate student at Stanford University. The company guaranteed that its technology could screen patients for diseases with a sample from a single finger prick of blood instead of taking a full blood draw from patients.

Holmes received nearly $1 billion in investments, but the results were often faulty, and the company frequently relied on commercially available blood analyzer machines to conduct its tests, according to court documents. 

During the sentencing, Davila questioned Holmes’ decision-making.

“This case is so troubling on so many levels,” Davila said. “What was it that caused Ms. Holmes to make the decisions she did? Was there a loss of a moral compass?”

Holmes let the Judge know that she accepted responsibility for her actions and would continue trying to help others in a more positive way.

“I regret my failings with every cell of my body,” Holmes said.

Another former Theranos executive and Holmes’ ex-boyfriend Ramesh “Sunny” Balwani was also convicted for his involvement in defrauding investors and patients, and he was sentenced to almost 13 years in prison.

He was ordered to report to prison on April 20, while Holmes is ordered to report to prison on April 27.

Reuters and The Associated Press contributed to this report.