Elizabeth Holmes Ordered to Report to Prison by May 30
Elizabeth Holmes, the founder of the failed blood-testing startup Theranos, has been ordered to report to prison by May 30 to begin serving her 11-year sentence for defrauding investors. This comes after her last-minute appeal to remain free on bail while she fought to overturn her conviction was denied by the Ninth Circuit Court of Appeals. Holmes had previously been ordered to begin her sentence on April 27. However, she filed an appeal just days before she was set to begin her prison term.
Holmes dropped out of Stanford at the age of 19 to focus full-time on Theranos, which claimed to have invented technology that could accurately test for a range of conditions using just a few drops of blood. The company raised $945 million from investors and was valued at $9 billion at its peak. However, it began to unravel after a Wall Street Journal investigation in 2015 reported that Theranos had only ever performed roughly a dozen of the hundreds of tests it offered using its proprietary technology, and even those with questionable accuracy.
Holmes and Balwani Ordered to Pay Restitution of $452 Million
In addition to her prison sentence, Holmes and her ex-boyfriend and former Theranos COO Ramesh « Sunny » Balwani have been ordered to pay restitution of roughly $452 million to victims of their crimes. They will be jointly and severally liable for this sum, meaning each could be individually liable for the entire amount. Balwani was indicted alongside Holmes and convicted of fraud in a separate trial. He reported to prison last month to begin serving out his nearly 13-year sentence, after losing a last-minute appeal similar to Holmes.
The district court previously recommended that Holmes serve out her term at Federal Prison Camp in Bryan, Texas. As she prepares to begin her sentence, the case serves as a cautionary tale for entrepreneurs and investors alike, highlighting the importance of transparency and ethical business practices.
Keywords: Elizabeth Holmes, Theranos, fraud, prison, restitution, Sunny Balwani, Wall Street Journal, transparency, ethical business practices.
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