Elizabeth Holmes, the disgraced founder of Theranos, will continue serving her prison sentence after a federal appeals court in San Francisco denied her bid to overturn her fraud conviction. The court found no legal missteps during her trial for defrauding investors with false claims about her blood-testing startup's capabilities.
The three-judge panel also upheld the fraud conviction of Holmes' former business partner, Ramesh “Sunny” Balwani. Additionally, the court affirmed a lower court's order requiring Holmes and Balwani to pay $452 million in restitution to defrauded investors.
Throughout Theranos' turbulent 15-year history, Holmes, as CEO, claimed that her startup had developed a revolutionary medical device capable of detecting numerous diseases and conditions using just a few drops of blood. However, the technology was ineffective, and the claims were later proven to be false.
Holmes, a 41-year-old mother of two, began her 11-year sentence in May 2023 at a federal prison in Texas. Her expected release date is March 19, 2032. Meanwhile, Balwani, aged 59, was sentenced to nearly 13 years in a California prison and is set to be released in 2033.
In their appeal, Holmes and Balwani argued that legal errors occurred during their separate 2022 trials. They contended that the court improperly allowed some testimony while prohibiting other crucial evidence. However, Judge Jacqueline Nguyen rejected these claims, stating in a 54-page ruling that no significant violations or errors were found.
Holmes' meteoric rise in Silicon Valley once placed her on the covers of business magazines, heralding her as the next Steve Jobs. She managed to raise nearly $1 billion from prominent investors like software magnate Larry Ellison, media mogul Rupert Murdoch, and the Walton family of Walmart fame.
Holmes leveraged a high-profile Theranos board, which included former Defense Secretary James Mattis, who testified against her, and two former secretaries of state, Henry Kissinger and the late George Shultz. Alexander Shultz, son of George Shultz, submitted a statement condemning Holmes for deceiving his father.
The deception was exposed in 2015 following a series of explosive articles in The Wall Street Journal and a regulatory audit that revealed serious flaws in Theranos' technology. This led to the company's eventual collapse. The scandal has since been the subject of a book, an HBO documentary, and an award-winning TV series, marking one of Silicon Valley's biggest downfalls.
