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Elizabeth Holmesthe disgraced founder of failed blood testing startup Theranos, who was convicted last year on charges that she cheated investors With a fortune in excess of $100 million, she has lost her recent attempt to avoid prison while appealing her conviction.
Mrs. Holmes, whose case throws a glaring light on us The Culture of Hubris in Silicon ValleyHe must report to jail on May 30, a judge of the US Circuit Court of Appeals for the Ninth Circuit ruled declined her attempt to remain free on bail on Tuesday.
Mrs. Holmes and her first lieutenant at Theranos, Ramesh Balwaniwho was found guilty of fraud in a separate trial and was serving his sentence last month, were also present ordered to pay $452 million as compensation for the victims of corporate fraud.
Of that sum, Judge Edward J. Davila of the US District Court for the Northern District of California, who oversaw both trials, ruled that Ms. Holmes and Mr. Balwani should pay $125 million to media mogul Rupert Murdoch, who invested in Theranos. Walgreens and Safeway, which had done business with the company, were also identified as victims for reimbursement purposes.
Why it matters: Ms Holmes’ conviction was the end of an era.
Theranos raised nearly $1 billion from investors for a technology that the company says can test a variety of diseases using just a few drops of blood from a patient. After those claims were found to be false, both Ms Holmes and Mr Balwani were accused of defrauding investors.
Their convictions and sentences – 11 years for Ms Holmes, 13 for Mr Balwani – have increased contributed to the feeling in Silicon Valley that the era of the “fake-it-til-you-make-it” approach may be coming to an end. Ms. Holmes, who dropped out of Stanford to start the company, hit one Paper net worth of $4.5 billion and had prominent supporters. Her precipitous decline has been extensively documented in television shows, podcasts, and documentaries.
Background: A last-minute attempt to avoid prison.
Ms Holmes is appealing her conviction, a trial that delayed her originally scheduled April 27 start date. Last month, Judge Davila denied a last minute request from Ms Holmes to remain vacant pending her appeal.
Mrs. Holmes was convicted of four offenses last year to defraud investors.
Mr Balwani, also known as Sunny, was Mrs Holmes’ close professional associate and former lover. He was convicted of 10 counts of wire fraud and two counts of conspiracy to commit wire fraud in a trial last year, a sentence more severe than Ms Holmes’. His lawyers have appealed his conviction.
What’s next: Mrs. Holmes will go to prison.
Ms Holmes is due to turn herself in to authorities after Memorial Day weekend. She was originally ordered to report to the federal prison camp in Bryan, Texas. She lives with her partner in California. Billy Evansand her two young children.
