Elizabeth Holmes' bid to overturn her fraud conviction has failed, with a federal appeals court affirming her guilt and her former partner Sunny Balwani's. This decision underscores the severity of their deception and the consequences for misleading investors about Theranos' capabilities.
Elizabeth Holmes, the once-celebrated founder of Theranos, will remain in prison. A federal appeals court has rejected her attempt to overturn her fraud conviction, stating that she failed to demonstrate any legal errors during her trial. This ruling solidifies the consequences of her false claims about Theranos' blood-testing technology.
The three-judge panel in San Francisco also upheld the fraud conviction of Holmes’ former business partner and lover Ramesh “Sunny” Balwani— as well as a lower’s court order for the two to pay $452 million in restitution.
Holmes, who served as CEO throughout Theranos' 15-year history, claimed her startup had developed a revolutionary medical device capable of detecting numerous diseases from a few drops of blood. However, this technology never materialized, and her claims were proven false.
Currently, Holmes is serving an 11-year sentence in a federal prison in Texas, with a projected release date of March 19, 2032. Balwani received a nearly 13-year sentence and is scheduled for release in 2033.
Holmes and Balwani argued that legal errors occurred during their separate trials in 2022. They contested certain testimonies, including that of a former Theranos employee, and claimed that other testimony was improperly prohibited.
Judge Jacqueline Nguyen dismissed these claims in a 54-page ruling, stating that the pair had not proven any violations or significant errors by the lower court.
Holmes' rise in Silicon Valley was meteoric. She graced the covers of business magazines, hailed as the next Steve Jobs. She secured nearly $1 billion in investments from prominent figures such as:
Holmes also leveraged a high-powered Theranos board, which included former Defense Secretary James Mattis.
Mattis testified against her during the trial.
Other members included two former secretaries of state, Henry Kissinger and the late George Shultz. Alexander Shultz, George's son, submitted a statement condemning Holmes for deceiving his father.
The truth about Theranos began to surface in 2015, thanks to investigative articles in The Wall Street Journal and a regulatory audit. These investigations revealed potentially dangerous flaws in the company's technology, leading to its eventual collapse.
The Theranos scandal has been the subject of:
...solidifying its place as one of Silicon Valley's most significant cautionary tales.