Elizabeth Holmes, the founder of Theranos, will not be going to prison on April 27 to serve her 11-year sentence for fraud and conspiracy charges, according to an article by the Wall Street Journal. Although her request to remain free while she appeals her conviction was denied by U.S. District Court Judge Edward Davila earlier this month, she directly asked the Ninth U.S. Circuit Court of Appeals this week if she could stay out of prison during the appeals process, which automatically puts her reporting date on hold while the court considers her request.
This is just the latest development in a Silicon Valley story that has captured the attention of the business world and was even turned into an Emmy-award-winning limited series called “The Dropout” on Hulu. Holmes was convicted on four counts of fraud and conspiracy in January 2022 after a four-month trial. At her sentencing hearing in November of the same year, Judge Davila ordered her to surrender on April 27, 2023.
Judge Davila denied Holmes’s previous request to remain free while she appeals her conviction, stating that although she presented clear and convincing evidence that she would not flee, he did not believe she raised a substantial question of law or fact that would likely result in reversal or a new trial of all counts.
Holmes’s former Theranos colleague Ramesh “Sunny” Balwani, who was also found guilty of defrauding the company’s investors and patients, similarly asked the Ninth Circuit if he could remain free while he contests his conviction, but his request was rejected three weeks later. However, the move allowed him to push his own surrender to a low-security prison facility in San Pedro, California, from mid-March to April 20.
An association for criminal defense lawyers urged the Ninth Circuit on Monday to order a new trial for Holmes, arguing that prosecutors violated Rule 16 of the Federal Rules of Criminal Procedure by disclosing the identity of a witness just five weeks before the government’s opening arguments in the trial. It remains unclear whether this will have any impact.
Holmes has two children under the age of two and was previously set to turn herself over to the U.S. Marshal’s Office before being transferred to a federal prison facility. The court had recommended the Federal Prison Camp at Bryan, Texas, which has dormitory housing for around 550 inmates, a low staff-to-inmate ratio, and is “work- and program-oriented,” according to the Federal Bureau of Prisons. Before her latest request, Holmes was expected to be taken to this facility.
Holmes, who dropped out of Stanford in 2003 to build Theranos, was once widely celebrated by the business press for developing a technology that could supposedly test for hundreds of conditions with just a pinprick of blood. Investors believed her claims and provided more than $400 million of funding to the company, giving it a valuation of $9 billion. However, in 2015, a series of articles by the Wall Street Journal revealed that the technology did not work as advertised. In 2018, Holmes and Balwani were indicted on criminal fraud charges, and the company announced that it would dissolve soon after.