Tag: theranos

Elizabeth Holmes reports to prison | CNN Business

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Elizabeth Holmes reported to prison on Tuesday, capping off a stunning downfall for the disgraced founder of failed blood testing startup Theranos.

Holmes was sentenced to more than 11 years in prison last November, after she was convicted months earlier on multiple charges of defrauding investors while running the now-defunct startup.

Her request to remain free on bail while she fights to overturn her conviction was denied by an appellate court earlier this month. Judge Edward Davila, who presided over her trial, ordered Holmes to turn herself in to the Bureau of Prisons by May 30 to begin serving her sentence.

Holmes arrived Tuesday at Federal Prison Camp Bryan in southern Texas, a minimum security federal prison camp that is approximately 100 miles from Houston, where she grew up before moving to California to attend Stanford.

“We can confirm Elizabeth Holmes has arrived at the Federal Prison Camp (FPC) Bryan in Bryan, Texas, and is in the custody of the Federal Bureau of Prisons,” a spokesperson for the Bureau of Prisons said in a statement provided to CNN.

Her ex-boyfriend and former Theranos COO Ramesh “Sunny” Balwani was also convicted of fraud, and reported to prison in California last month to begin serving out his sentence.

Holmes was once an icon in the tech world, serving as a posterchild for the limitless ambitions and potential of Silicon Valley. Now, she and Balwani are the rare tech executives tried for, and convicted on, fraud charges.

Holmes dropped out of Stanford at the age of 19 to focus full-time on Theranos, a startup that claimed to have invented technology that could accurately test for a range of conditions using just a few drops of blood. Theranos raised $945 million from an impressive list of investors and was valued at some $9 billion at its peak – making Holmes a paper billionaire. She graced magazine covers and engaged in public speaking events wearing a black turtleneck that invited comparisons to the late Apple CEO Steve Jobs.

Her company 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 with questionable accuracy. It also came to light that Theranos was relying on third-party manufactured devices from traditional blood testing companies rather than its own technology.

Theranos ultimately dissolved in September 2018.

Holmes and Balwani were first indicted together nearly five years ago on the same 12 criminal charges. Their trials were severed after Holmes indicated she intended to accuse Balwani of sexually, emotionally and psychologically abusing her throughout their decade-long relationship, which coincided with her time running the company. (Balwani’s attorneys have denied her claims.)

This month, Davila ordered Holmes and Balwani to pay restitution of roughly $452 million to victims of their crimes.

Before her sentencing was announced in November, a tearful Holmes spoke to the court in San Jose, California.

“I loved Theranos. It was my life’s work,” she said. “The people I tried to get involved with Theranos were the people I loved and respected the most. I am devastated by my failings.”

She went on to apologize to the employees, investors and patients of Theranos.

“I’m so, so sorry. I gave everything I had to build our company and to save our company,” she said. “I regret my failings with every cell in my body.”

– CNN’s Brad Parks contributed to this report.

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April 12, 2021
What Elizabeth Holmes’ life in prison could look like | CNN Business

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Once a Silicon Valley icon and paper billionaire, Elizabeth Holmes will now have to wake every morning at 6 a.m., hold a job paying as little as $0.12 an hour, and share bathing facilities at a prison camp in southern Texas.

Holmes reported to the Federal Prison Camp in Bryan, Texas, on Tuesday to begin serving out her 11-year sentence after being convicted on multiple charges of defrauding investors while running the now-defunct startup Theranos. Her request to remain free on bail while she appeals her conviction was denied by an appellate court earlier this month.

Located approximately 100 miles outside of Houston, where Holmes grew up before moving to California to attend Stanford, FPC Bryan is a minimum-security federal prison camp housing more than 600 women offenders.

Bryan has other notable inmates. It is the same facility where Jennifer Shah, a cast member on Bravo’s “Real Housewives of Salt Lake City,” is serving out her own sentence for her involvement in a telemarketing fraud scheme.

Holmes herself once graced the covers of magazines, appeared alongside prominent figures like Bill Clinton at conferences and attracted a who’s who of investors for Theranos, which promised to test for a wide range of health concerns using just a few drops of blood. But it all began to unravel after a damning Wall Street Journal investigation in 2015. Holmes is now the rare Silicon Valley founder to be tried for and convicted of fraud.

Federal prison camps are minimum security institutions with dormitory housing, a relatively low staff-to-inmate ratio, and limited or no perimeter fencing, according to the Federal Bureau of Prisons. These prisons are sometimes nicknamed “Camp Fed” because they’re less restrictive than other institutions.

But according to Mark MacDougall, a longtime white-collar defense lawyer and former federal prosecutor, the prison won’t be a walk in the park for Holmes.

“I think people who talk about ‘Camp Fed’ have never actually been inside a federal correctional institution,” MacDougall told CNN. “It’s not a place where people would want to spend time if they could be somewhere else.”

FPC Bryan will likely be heavily populated with white-collar offenders, according MacDougall. Housing at FPC Bryan typically consists of dormitory-style arrangements featuring a four-bunk cubicle and communal bath facilities, he said.

“There’s no privacy,” he said.

Inmates at FPC Bryan are required to maintain a job assignment, according to the prison’s handbook, with hourly wages ranging from $0.12 to $1.15. Holmes will have to wear a uniform of khaki pants and a khaki shirt – a far cry from her black turtleneck days. She also can’t wear jewelry, except for a plain wedding band and a religious medallion without stones, according to the handbook, and the value of these items can’t exceed $100 each.

MacDougall noted that there’s many volunteer opportunities at Bryan, and it’s very likely that someone with Holmes’ background might find herself teaching.

“I expect she would be teaching in some fashion,” he said. “That’s a very common occupation for inmates who have some education.” (Holmes dropped out of Stanford at age 19 to pursue Theranos.)

Holmes, who became a mother of two in the time between her indictment in 2018 and the start of her prison sentence, will also only be able to see her children and other family during visiting hours on weekends and federal holidays at FPC Bryan. Holmes and her family have most recently been living in California.

As MacDougall put it, “Anybody that suggests that she’s going to be in a pleasant environment or have an easy time of it is kidding themselves.”

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April 12, 2021
Elizabeth Holmes objects to government requesting she pay $250 a month to victims after prison | CNN Business

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Elizabeth Holmes, the disgraced former Theranos CEO, has “limited financial means” and should not be forced to pay $250 a month to victims of her crimes after she is released from prison, her lawyers argued in a court filing on Monday.

The move from Holmes’ attorneys comes after federal prosecutors said in a separate filing last week that “clerical errors” had resulted in no payment schedule being set for Holmes’ restitution after she is released from prison. Holmes and former Theranos COO Ramesh “Sunny” Balwani were previously ordered to pay $452 million in restitution to victims of their crimes.

Holmes reported to prison late last month in Texas to serve out her more than 11-year sentence. She was convicted early last year on multiple charges of defrauding investors while running the failed blood-testing startup Theranos.

Federal prosecutors asked that once Holmes is on supervised released, criminal monetary penalties should be paid monthly in the amount of $250, or at least 10% of her wages, whichever is greater.

In the latest filing, Holmes’ attorneys argued “there is no basis in the record for the payment structure in the government’s request,” but did not object to her being asked to start paying $25 per quarter as part of her restitution while she is in prison.

Holmes, once a paper billionaire, could hold a job at the Federal Prison Camp in Bryan, Texas, with hourly wages ranging from $0.12 to $1.15, according to the prison’s handbook.

Theranos once claimed to have invented technology that could test for a range of conditions using a few drops of blood. It was valued at some $9 billion at its peak and raised money from a long list of prominent investors. Then it all began to unravel after a damning Wall Street Journal report cast doubt on the company’s claims.

As part of the original restitution order, some $125 million is owed to media mogul Rupert Murdoch, as well as millions in payments to other Theranos investors.

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April 12, 2021
Elizabeth Holmes could be released from prison two years earlier than expected | CNN Business

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Disgraced former Theranos CEO Elizabeth Holmes could be out of prison nearly two years earlier than expected, according to the projected release date posted by the Bureau of Prisons.

Holmes reported to a Texas prison camp in late May after being sentenced to 11 years and three months in prison at the end of last year. The Bureau of Prisons online database now reports, however, that Holmes’ expected release date is December 29, 2032 – which would take roughly two years off of her full sentence.

The discrepancy appears to be due to how the Bureau of Prisons calculates its estimated release date.

A spokesperson for the Bureau of Prisons told CNN that the agency cannot comment on the conditions of any individual inmate, but said that inmates can earn Good Conduct Time (or GCT) that is calculated into their projected release date. Qualified inmates are currently eligible for up to 54 days of GCT time for each year of the sentence imposed by the court.

Moreover, inmates have other ways of earning time credits while incarcerated, the spokesperson said, pointing to a range of other factors that could go into calculating the agency’s estimated release date, including an inmate’s participation in various prison programs. These factors that go into calculating an estimated release date are not unique to Holmes’ case, but standard for inmates.

Holmes is currently serving out her sentence at Federal Prison Camp Bryan, a minimum security federal prison camp that is approximately 100 miles from Houston. Her request to remain free on bail while she fights to overturn her conviction was denied by an appellate court in May.

Holmes was once an icon in the tech world, serving as a poster child for the limitless ambitions and potential of Silicon Valley. She is now one of the rare tech executives to be serving prison time after being convicted early last year on multiple charges of defrauding investors while running Theranos.

Theranos was valued at $9 billion at its peak – making Holmes a paper billionaire. The company 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 with questionable accuracy. It also came to light that Theranos was relying on third-party manufactured devices from traditional blood testing companies rather than its own technology.

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April 12, 2021
Elizabeth Holmes must report to prison this month while waiting out her appeal, judge rules | CNN Business

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A judge on Monday denied Elizabeth Holmes’ request to remain free while she appeals her conviction, setting the stage for the disgraced Theranos founder to report to prison later this month.

In his order, Judge Edward Davila of the Northern District of California said Holmes does not pose a danger to the community or a flight risk, but he cast doubt on her appeal. Even if Homes won her appeal, he said, it is unlikely to result in a reversal, or an order for a new trial, for all of the counts on which she was found guilty.

Davila previously ordered Holmes to turn herself into custody on April 27, 2023.

Holmes was sentenced to more than 11 years in prison last November, after she was convicted months earlier on multiple charges of defrauding investors while running the failed blood testing startup Theranos. Attorneys for Holmes did not immediately respond to CNN’s request for comment on the ruling.

Ramesh “Sunny” Balwani, Holmes’ ex-boyfriend and the former chief operating officer at Theranos, was also found guilty on multiple counts of fraud in a separate trial. He was sentenced to nearly 13 years in prison last December. Balwani’s request to remain out of prison during his appeal was also denied, and he has been ordered by Davila to surrender to prison on April 20.

Once valued at $9 billion, Theranos attracted top investors and retail partners with claims that it had developed technology to test for a wide range of conditions using just a few drops of blood. The company 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 with questionable accuracy.

Holmes’ trial was initially delayed multiple times, due to the onset of the coronavirus pandemic and then because of her pregnancy. Following her sentencing in November, Holmes sought to delay the start of her prison term after giving birth to her second child.

While Davila denied Holmes represented a flight risk, he also addressed the fact that she had previously booked a one-way ticket to Mexico in January 2022.

“Booking international travel plans for a criminal defendant in anticipation of a complete defense victory is a bold move, and the failure to promptly cancel those plans after a guilty verdict is a perilously careless oversight,” Davila wrote in the court filing.

Holmes’ attorneys had previously claimed that Holmes had hoped the verdict would be different when booking the travel plans and that she wanted to make this trip to attend the wedding of friends in Mexico. Davila wrote in court documents that the court accepts Holmes’ “representation that the oneway flight ticket—while ill-advised—was not an attempt to flee the country.”

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April 12, 2021