A U.S. District Court judge has ordered Elizabeth Holmes, founder and CEO of the disgraced blood-testing company Theranos, to report to prison later this month after ruling that she cannot remain free on bail as she appeals her fraud conviction.
In an 11-page ruling issued late Monday, U.S. District Judge Edward Davila concluded there wasn’t enough evidence to permit Holmes to remain free while her legal team works to persuade an appeals court to reverse the guilty verdict she received at the end of her months-long fraud trial in San Jose. Calif.
Once hailed as a tech industry superstar, Homes in January was convicted of three counts of wire fraud and one count of conspiracy to commit wire fraud. She was accused of bilking high-profile investors — among them media mogul Rupert Murdoch and the Walton family of Walmart fame — out of millions. Holmes wrongfully claimed Theranos’ technology, nicknamed “the Edison,” could administer tests for more than 200 diseases and medical conditions with just a single drop of blood.
Holmes was ultimately sentenced to 11 years in prison, a term that is slated to start April 27.
In her appeal, the 39-year-old mother of two argued that she did not promote a faulty product. The judge meanwhile concluded that while she did not pose any immediate threat, her “disputes do not directly pertain to the conduct for which” she was convicted.
“Ms. Holmes’s misrepresentations to Theranos investors involved more than just whether Theranos technology ‘worked as promised,’” the court’s opinion says.
“Ms. Holmes had also made several misrepresentations…such as those regarding the company’s financial status, reliance on third-party and commercially available devices, partnership with Walgreens, and validation by pharmaceutical companies.”
Holmes, a Stanford dropout, founded Theranos when she was 19 years old. Before the scam started to unravel in 2015, the health technology startup was valued at $9 billion.
The company’s disgraced COO and Holmes’ ex-boyfriend, Ramesh “Sunny” Balwani, was also ordered to spend 13 years behind bars in connection with the scheme. He is also due to begin serving his sentence later this month.