Could Theranos’ Elizabeth Holmes Avoid Prison?

Disgraced Theranos Founder Elizabeth Holmes Delays Prison Sentence

The disgraced and convicted former Theranos founder and CEO, Elizabeth Holmes was expected to report to prison on Thursday 27th April 2023. However, according to court filings, she will remain free for a little longer after her lawyers filed a last-minute appeal. So while the court is considering the said appeal, Miss Holmes will remain free.

After a trial that lasted for almost four months, Holmes was convicted by a federal jury on January 3rd, 2022. The Jury found Holmes guilty of “one count of conspiracy to commit fraud on investors and three counts of committing fraud on individual investors which involved wire transfers totaling more than $140 million,” as the DOJ states.

She would then be handed an 11-year sentence in November 2022. Her legal team tried to request that their client (Holmes) remains free while they appeal the sentence but the judge, U.S. District Judge Edward Davila, denied their request. This, therefore, confirmed Holmes’ prison sentence would start on April 27th as expected.

 However, on Tuesday the 25th, her lawyers pulled what can be regarded as a “hail Mary”. Her lawyers filed a motion for release pending appeal at the U.S. Court of Appeals for the 9th Circuit. The appeal challenges the ruling of Judge Edward Davila which as mentioned earlier, denies Holmes’ request to remain free on bail until the higher court resolves her appeal.

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As per 9th Circuit rules, “If the appellant is on bail at the time the motion is filed in this Court, that bail will remain in effect until the Court rules on the motion.” Seeing as that Holmes was currently out on bail, it means that as soon as the motion was filed, Holmes’ current prison reporting date is suspended. That is until the court makes a ruling on her appeal.

Could Elizabeth Holmes actually walk?

Elizabeth Holmes founded Theranos in 2003. The company claimed it had developed a proprietary device capable of testing a patient’s blood for multiple diseases using only a single drop of blood from the patent. The company grew significantly over the years to a peak valuation of around $10 billion with Holmes being propped as a visionary even being compared to Steve Jobs.

However, the tide started to turn for Elizabeth and Theranos in 2015 due to whistleblowers. Some employees of Theranos tipped The Wall Street Journal that the company’s blood-testing technology didn’t work at all.

What followed is perhaps the biggest fraud expose in recent history only rivaled by Sam Bankman-Fried’s FTX that has culminated in Elizabeth getting an 11-year prison sentence. However, her Lawyers have made it clear that they will fight the sentencing and conviction of their client to the very end.

The lawyers labeled Elizabeth’s conviction “unjust” as they filed their appeal last week in an attempt to reverse her conviction. As mentioned earlier, the former Theranos CEO was found guilty on four accounts of defrauding investors. A central tenet of Holmes’ defense is that she never “knowingly misrepresented the capabilities” of the now-known to be flawed blood-testing technology her company developed.

As Palo Alto Online claims, Holmes and her lawyers contend that she relied on the information provided by the scientists in her lab which led her to believe the technology worked.

During the court proceedings, Dr. Kingshuk Das, a former lab director at Theranos testified against Holmes. He said that while working there he did a “comprehensive retrospective analysis” of the Theranos machines, called Edisons, and found “possible patient impact for every test reported.”

The lawyers claim that Dr. Das’s testimony amounts to an expert opinion and therefore should have been disclosed prior to him taking the stand.

Holmes’ defense also makes the argument that Holmes’ business former partner, over, and fellow Theranos convict, Ramesh “Sunny” Balwani, took “sole responsibility” for the financial operations of the company which is what she was convicted for.

Could Elizabeth Holmes actually walk? Well, her appeal is backed by the National Association of Criminal Defense Lawyers. According to the association, Dr. Das’ testimony was erroneous. They, therefore, advise that the conviction should be reversed.

If the conviction is not reversed, Holmes’ lawyers are also arguing for a reduced sentence. To this end, they claim that the sentence (11 years and 3 months), was “unjust” as it was based on an improper calculation of the number of victims and the amount of money people lost.

Whatever the outcome, one thing is clear though, if at all Holmes will serve her prison sentence, it won’t be anytime soon. This is because the appeal is expected to take months at the very least if not years!