Elizabeth Holmes, the founder of Theranos, is scheduled to surrender herself on Tuesday to begin serving an 11-year sentence. This marks the final chapter in a captivating fraud saga that has captivated Silicon Valley for years.
At 39 years old, Elizabeth Holmes has been instructed to report to a minimum-security federal prison camp in Texas by 2 pm on Tuesday, as stated in a previous court filing. Read more.
Following her indictment on fraud charges 2018 for her role as the head of the failed blood-testing company, Holmes had been out on bail. However, in November 2022, she was convicted of four counts of defrauding investors and handed an 11-year and three-month prison sentence.
According to federal law, Elizabeth Holmes must serve at least 85% of her sentence, even if it is reduced for good behaviour. The federal camp Bryan, where she has been assigned, primarily houses non-violent female federal inmates, particularly those involved in white-collar crimes.
Unlike higher-security prisons, this facility has less stringent rules and lacks fencing. The program at the camp focuses on work, requiring all inmates to hold a job for a minimum of 90 days.
Elizabeth Holmes attempted to delay serving her sentence by arguing that she should remain out of custody while seeking a new trial based on alleged misconduct by the prosecution. However, US District Judge Edward Davila denied her requests, stating that a new trial or overturning the guilty verdict was unlikely.
Before beginning her prison term, Elizabeth Holmes spent her final days of freedom with her partner, Billy Evans, and their two children. Her trial was delayed initially due to her first child’s birth in July 2021, and she appeared at her sentencing hearing in November while pregnant with her second child, born in March.
Sunny Balwani, Elizabeth Holmes’ former business and romantic partner, received a 13-year sentence after being convicted on all 12 counts of fraud. He began serving his sentence in a California prison in April.
The imprisonment of both Holmes and Balwani signifies the end of Theranos’ dramatic tale. Holmes founded the company in 2003 after leaving Stanford University at 19. With promises of a groundbreaking technology capable of running multiple health tests with just a single drop of blood, Theranos amassed millions of dollars in funding from prominent backers like former Secretary of State Henry Kissinger and media mogul Rupert Murdoch.
At its peak in 2014, Theranos was valued at over $10 billion. However, a 2015 Wall Street Journal report exposed flaws in the company’s core technology, leading to its rapid downfall. By 2018, Theranos had dissolved.
The high-profile trial of Holmes lasted 18 weeks and included testimony from notable Theranos investors, including former Defense Secretary James Mattis. Throughout the proceedings, the defence portrayed Holmes as an ambitious and naive young entrepreneur unaware of the extent of Theranos’ technological shortcomings. Before her sentencing, Holmes expressed remorse for letting down those who believed in her.
“I am devastated by my failures,” she stated. “Every day for the past years, I have felt deep pain for what people went through because I failed them. I regret my shortcomings with every fibre of my being.”
The severity of the sentencing, far exceeding the 18 months of house arrest requested by Holmes’ defence team, is believed to have set a new precedent in Silicon Valley. It highlights the need for stronger checks and balances in the hype-driven cycle that enabled Theranos to succeed.
Meanwhile, Holmes has embarked on an image rehabilitation campaign, breaking her seven-year media silence with an extensive profile in The New York Times. The profile portrays her new life as “Liz,” a dedicated mother who deeply abandoned her signature.