Elizabeth Holmes, the disgraced founder of blood testing startup Theranos, loses her latest bid to avoid prison as she tries to overturn her conviction in a blood-testing hoax.
On Tuesday, US district judge Edward Davila rejected Holmes’ appeal to remain free and ordered her to pay 452 million US dollars (£362.6 million) in restitution to the victims of her crimes.
The decision comes on an appeal filed as a last-minute legal manoeuvre to delay the start of her 11-year sentence on April 27.
Holmes has been free on bail since a jury found her guilty of three counts of wire fraud and one count of conspiracy in January 2022.
Holmes is being held jointly liable for the restitution amount with her former lover and top Theranos executive, Ramesh ‘Sunny’ Balwani.
The 57-year-old is now serving a nearly 13-year prison sentence in a federal prison located in California after being convicted of 12 counts of fraud and conspiracy.
Davila will now set a new date for Holmes, 39, to leave her home in the San Diego area and report to prison.
The punishment will separate Holmes from her current partner, William ‘Billy’ Evans, their one-year-old son, William, and three-month-old daughter, Invicta.
Holmes was sentenced after a four-month trial revolving around her downfall from a rising Silicon Valley star to an alleged scam artist chasing fame and fortune while fleecing investors and endangering the health of patients relying on Theranos’ flawed blood tests.
When she was sentenced to 11 years in prison in November, she was visibly pregnant. She had given birth to her first child in July 2021, while she was on trial for fraud.
Davila has recommended that Holmes serves her sentence at a women’s prison in Bryan, Texas.
It has not been disclosed whether the federal Bureau of Prisons accepted Davila’s recommendation or assigned Holmes to another facility.
In his restitution ruling, Davila determined that Holmes and Balwani should pay media mogul and Theranos investor Rupert Murdoch $125million (£100.3 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 $40million (£32.1 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 $14.5million (£11.6 million) is owed to Safeway, which 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 $800million (£641.7 million) range.
Both Holmes – whose stake in Theranos was once valued at $4.5billion (£3.6 billion) – and Balwani – whose holdings were once valued around $500million (£401.1 million) – have indicated they are nearly bankrupt after running up millions of dollars in legal bills while proclaiming their innocence.
Holmes’s lawyers have been fighting her conviction on grounds of alleged mistakes and misconduct during her trial.
They also said errors and abuses that biased the jury were so egregious she should be allowed to stay out of prison while the appeal unfolds – a request that has now been rebuffed by both Mr Davila and the Ninth Circuit Court of Appeals.
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