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Elizabeth Holmes, the founder of failed blood-testing startup Theranos, who was convicted last year of defrauding investors of more than $100 million, made her most recent bid to avoid jail time as she appeals her conviction. Application failed.
Ms. Holmes’ case casts a harsh shadow on Silicon Valley’s culture of hubris after a judge ruled that Ms. Holmes must report to jail on May 30 after the Ninth Circuit Court of Appeals ruling Her attempt at bail was rejected on Tuesday.
Ms Holmes and her top lieutenant at Theranos, Ramesh Balwani, were also convicted of fraud in a separate trial and began serving prison sentences last month. Ordered to pay $452 million To compensate victims of corporate fraud.
Of that total, Judge Edward J. Davila of the U.S. District Court for the Northern District of California, which is overseeing both trials, ruled that Ms. Holmes and Mr. Balwani should pay media mogul Rupert • Rupert Murdoch paid $125 million, which invested in Theranos. Walgreens and Safeway, which have business deals with the company, were also identified as victims for compensation.
Why it matters: Ms Holmes’ conviction marks the end of an era.
Theranos, which has raised nearly $1 billion from investors, says it can detect multiple diseases with just a few drops of a patient’s blood. Both Ms Holmes and Mr Balwani have been charged with defrauding investors after those claims proved false.
Their convictions and sentences — 11 years for Ms. Holmes and 13 for Mr. Balwani — have created a feeling in Silicon Valley that the era of the “fake it” approach may be ending. Ms. Holmes, a Stanford University dropout who started the company, has a net worth of $4.5 billion and celebrity backing. Her dramatic downfall has been widely documented in TV shows, podcasts and documentaries.
Context: A last-minute effort to avoid jail time.
Ms Holmes is appealing her conviction, a process that has delayed her jail date, which had been set for April 27.Last month, Judge Davila reject Ms Holmes made a last-minute request to be freed pending the appeal.
Ms. Holmes was convicted last year of four felony counts of defrauding investors.
Mr Balwani, also known as Sunny, is Ms Holmes’ close professional partner and one-time romantic partner. He was convicted last year of 10 counts of wire fraud and two counts of conspiracy to commit wire fraud, a harsher sentence than Ms Holmes’. His legal team has appealed his conviction.
Next step: Ms Holmes is going to jail.
Ms Holmes will surrender to authorities after Memorial Day weekend. She was originally ordered to report to a federal prison camp in Bryan, Texas. She lives in California with her partner, Billy Evans, and their two young children.
