The vaunted CEO’s reputation began to unravel more than six years ago when a media investigation revealed that Theranos — purportedly capable of running many tests from a few drops of blood — was using conventional lab machines from other companies to complete many of its tests. Former employees said the technology was inconsistent and didn’t work nearly as well as Theranos was advertised to doctors and investors.
Holmes went from being a Silicon Valley youth leader to the infamous subject of a best-selling book, multiple podcasts, an HBO documentary, and a Hulu TV series.
Holmes, who started Theranos while still a student at Stanford University, is appealing her fraud conviction, a process that can stretch for months or years. She asked the judge to allow her to remain at large while the appeal made its way through the court system, but Davila, who had heard and sentenced her original case, denied the request. In April, Holmes appealed Davila’s decision in a last-ditch effort to stay out of jail, but the appeals court’s decision on Tuesday meant Holmes pushed back her report by nearly a month.
Holmes’ former business partner, Sunny Balwani, was convicted in a separate but similar trial of 12 counts of conspiracy to commit wire fraud and wire fraud. He was sentenced to nearly 13 years in prison and began his confinement on April 20 at the Federal Correctional Institution in San Pedro, California.
After Theranos eventually shut down in 2018, amid multiple regulatory and media investigations, Holmes kept a low profile until her months-long trial attracted widespread media and public attention in late 2021. The former CEO was found guilty of misleading investors about the company’s capabilities. Theranos has raised about $900 million from investors, including prominent US technology leaders and political figures.
Elizabeth Holmes, founder of Theranos, has been found guilty in a landmark fraud case in Silicon Valley
Among its investors were Oracle co-founder Larry Ellison, media executives Rupert Murdoch, the Cox family, and the family of former Education Secretary Betsy DeVos. Holmes also attracted prominent statesmen such as Henry Kissinger and Jim Mattis to her board.
Mattis later testified in her trial, saying he would have had a different view of the company if he had known about some of the limitations of the Theranos blood test device.
“It would have dampened my enthusiasm considerably,” he said in response to the prosecutor’s questions about the use of third-party devices.
Her story has become symbolic in some circles of apparent greed and the “grow at any cost” mentality within Silicon Valley. But members of the tech community have sought to distance themselves from Holmes and Theranos, whom they often view as anomalies.
Holmes has two children, one born before her trial and one born after her sentencing. Davila had previously recommended she was serving her time in a federal prison camp in Bryan, Texas, about 100 miles outside of Houston.
The trial of Elizabeth Holmes is the most exciting in Silicon Valley
In a court document released in April to her appeal, Holmes’ attorneys argued that her 135-month sentence was “excessive” and the result of errors in calculation during the delivery of the federal sentence.
The document states, “This court should overturn the conviction or at least retrial.”
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