Elizabeth Holmes, the founder of Theranos who is now just 39 years old, reported to Federal Prison Camp Bryan in Bryan, Texas, to start her 11-year sentence on Tuesday. She was due to report to the prison camp, located relatively close to her hometown of Houston, by 2 pm on Tuesday. She had been out on bail since being found guilty.
Holmes was indicted on 11 charges and convicted of four counts of fraud and conspiracy in 2022, then attempted to delay her sentence by requesting to remain out of prison until all of her appeals were heard and settled. A judge, ruling on the matter in mid-May 2023, disagreed and ruled that Holmes would report to prison. During her original trial,
In another, similarly timed ruling, Homes was ordered to pay $452 million in restitution to the victims of her fraudulent Theranos activities by U.S. District Judge Edward Davila. She and Ramesh Balwani, her lover and COO at Theranos, are jointly liable for that massive sum. Balwani was sentenced to 13 years on 12 counts of fraud and conspiracy.
Holmes raised nearly $1 billion from investors, including Rupert Murdoch, to whom she and Balwani were ordered to pay $125 million in restitution. Holmes also agreed to pay $500,000 to the SEC.
Holmes founded Theranos after dropping out of Stanford, and was lionized by the media for what Theranos was doing for years. It received its first funding in 2004. That, however, came to a crashing halt when the Wall Street Journal, in 2015 and 2016, shed light on its blood tests not working and how it had tried to cover up that inconvenient fact.
One of the most damning Wall Street Journal reports, published in 2015, shed light on the fact that Theranos was using traditional blood testing machines to do its testing work, not its proprietary tests.
Theranos denied those initial reports, but then dissolved in 2018, at which point she and Balwani were indicted.
Holmes, who has a two-year-old and a three-month-old that her family members will raise while she is in prison, has been allotted three hundred minutes per month on the jail phone. Her family members can also visit her in the prison camp on the weekends.
The Theranos episode was highly embarrassing for many high-profile people who had been convinced to become members of its board of directors, something that lent it credibility and enabled it to rake in funds from gullible investors. Those board members included men like former Secretary of State and geopolitics maestro Henry Kissinger, four-star general Jim Mattis, former Secretary of State George Shultz, former Wells Fargo CEO Richard Kovacevich, and former Secretary of Defense William Perry.
Featured image credit: By Glenn Fawcett – https://www.dvidshub.net/image/911248, Public Domain, https://commons.wikimedia.org/w/index.php?curid=88672734
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