Elizabeth Holmes loses latest bid to avoid prison and gets hit with $452M restitution bill

A judge had previously ordered the Theranos founder to surrender to federal prison authorities on April 27

Bay City News
Wednesday, May 17, 2023
Court denies Elizabeth Holmes' motion to stay out of prison
The U.S. Court of Appeals denied Theranos CEO Elizabeth Holmes' motion to stay out of prison while she appeals her conviction for wire fraud.

SAN FRANCISCO -- In a one-page order issued Tuesday afternoon, the U.S. Court of Appeals for the 9th Circuit denied a motion by convicted Theranos founder and CEO Elizabeth Holmes to stay out of prison while she appeals her conviction for wire fraud.

The court ruled that Holmes had not raised a "substantial question" regarding the conduct of her trial or shown that any trial errors were likely to result in reversal or a sentence shorter than the 11-year, three-month prison term handed down by U.S. District Judge Edward Davila.

UPDATE: Elizabeth Holmes ordered to report to prison May 30 after losing her bid to remain free

In January 2022, a jury convicted Holmes of misleading and defrauding investors about the capabilities of Theranos' blood-testing technology.

Davila had ordered Holmes to surrender to federal prison authorities on April 27 of this year, but that order was automatically suspended while the higher court decided whether to grant the bail request.

RELATED: Disgraced Theranos CEO Elizabeth Holmes' prison stay delayed with another appeal

It will be up to Davila to set a new surrender date for Holmes now that her request has been denied. Holmes's legal team filed a motion to have her new report date be May 30.

Holmes's appeal, per the 9th Circuit's order, will continue on its original schedule and will likely take several months or a year to be resolved.

Davila has recommended that Holmes serve her sentence at a women's prison in Bryan, Texas. It hasn't been disclosed whether the federal Bureau of Prisons accepted Davila's recommendation or assigned Holmes to another facility.

RELATED: Elizabeth Holmes must report to prison this month while waiting out her appeal, judge rules

In another ruling issued late Tuesday, Davila ordered Holmes to pay $452 million in restitution to the victims of her crimes. Holmes is being held jointly liable for that amount with her former lover and top Theranos lieutenant, Ramesh "Sunny" Balwani, who is already in prison after being convicted on a broader range of felonies in a separate trial.

In his restitution ruling, Davila determined that Holmes and Balwani should pay media mogul Rupert Murdoch $125 million -- by far the most among the investors listed in his order. The restitution also requires the co-conspirators in the Theranos scam to pay $40 million to Walgreens, which became an investor in the startup after agreeing to provide some of the flawed blood tests in its pharmacies in 2013. Another $14.5 million is owed to Safeway, which has also agreed to be a Theranos business partner before backing out.

In separate hearings, lawyers for Holmes and Balwani tried to persuade Davila their respective clients should be required to pay little, if anything. Prosecutors had been pushing for a restitution penalty in the $800 million range. Both Holmes - whose stake in Theranos was once valued at $4.5 billion - and Balwani - whose holdings were once valued around $500 million - have indicated they are nearly broke after running up millions of dollar in legal bills while proclaiming their innocence.

The Associated Press contributed to this article.

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