For a while I’ve been writing about the trial of Elizabeth Holmes, who started up the “blood testing” company Theranos and, along with her business and romantic partner Sunny Balwani, was convicted of several counts of wire fraud.
She was sentenced to 11 years in prison but more likely will serve 9½ (federal crimes don’t allow you much time off for good behavior). Reader Simon just sent me a link to this BBC article noting that her request to the judge to remain free while she appeals—a process that could take years—has been rejected. She’ll go into a minimum-security federal prison this month.
Click to read:
Theranos founder Elizabeth Holmes will report to prison at the end of the month after losing a bid to remain free while she appeals against her convictions.
Holmes was sentenced to over 11 years in prison for defrauding investors in her blood testing start-up.
A federal judge on Monday said Holmes failed to prove her appeals process would lead to a reversal of her case.
She is scheduled to go to prison on 27 April.
Holmes had said she would raise “substantial questions” that could warrant a new trial. Her attorneys also argued she should remain free to care for her two young children, including one who was born this year.
But in the Monday ruling, US District Judge Edward Davila said Holmes had not proven her appeal would result in a new trial.
“Contrary to her suggestion that accuracy and reliability were central issues to her convictions, Ms Holmes’s misrepresentations to Theranos investors involved more than just whether Theranos technology worked as promised,” he said.
I still think she’s going to take it on the lam: Holmes is entitled, narcissistic, and previously made one attempt to leave the U.S. while on trial:
Prosecutors, meanwhile, had argued Holmes was a flight risk because she had booked a one-way plane ticket to Mexico during her trial.
Homes’ attorneys said she and her partner Billy Evans were planning to attend a wedding and hoped she would be acquitted.
The ticket purchase was “ill-advised”, Judge Davila wrote in his ruling, though he added it did not constitute an attempt to flee.
“Booking international travel plans for a criminal defendant in anticipation of a complete defence victory is a bold move, and the failure to promptly cancel those plans after a guilty verdict is a perilously careless oversight,” he said.
If this was a trip to a wedding, why did they buy one-way tickets? Nobody has explained that. I’m thinking that she can’t bear the idea of a decade in jail (she now has two infants) and will try to flee again. But that’s just a guess.
If you’re interested in this case, which is fascinating, read John Carreyrou’s book on the startup and downfall of Theranos, Bad Blood: Secrets and Lies in a Silicon Valley Startup. It’s a page-turner. Carreyrou, at the time writing for the Wall Street Journal, broke the story and it was his reporting that ultimately got Holmes and Balwani indicted, tried, and convicted. A great read, you’ll see how charismatic Holmes was, managing to convince a gaggle of rich and famous people to give her startup money without having the device that was supposed to diagnose many diseases from a single drop of blood.
Haven’t they? There’s actually a very simple explanation that occurred to me straight away. That explanation is….
… she doesn’t want to go to prison.
There’s an even simpler explanation. She’s an American, and she was expecting the phrase “shotgun wedding” to be taken quite literally.
But surely she should have organised freight transport for the bodies to come back?
Dry ice and insulated should have been good enough, none of those expensive refrigerated shipping crates.
I doubt Elizabeth Holmes will go on the lam at this point. She’s had to surrender her passport and travel documents as a condition of her bond. Plus, after her conviction, the court required that her half-million dollar bond be secured by her parents’ home (which will be subject to forfeiture if she becomes a fugitive). Also, I doubt her romantic partner, hotel heir “Billy Evans,” would want to go on the run with her.
It would be very difficult for someone as recognizable as Holmes to go on the lam, especially with an infant and another young child. Plus, I doubt she’d want to live in any of the countries that don’t have an extradition treaty with the US. Finally, were she to run, she would forfeit all her appellate rights under the Fugitive Disentitlement Doctrine.
I was watching some of the HBO documentary last night. At one point, Theranos hired some big-name lawyers to assist them when journalists started asking awkward questions, which got me wondering: would the lawyers likely have known what was going on or were they probably in the dark too?
Thanks for that. I guess she’ll have to serve time after all. But how did she explain to the court that the tickets to Mexico were only ONE WAY TICKETS?
I think her story is that the wedding she was planning to attend in Mexico was scheduled after the trial was due to be over, and she was expecting an acquittal (and the resulting return on her passport).
As to why the ticket was one-way, I haven’t the foggiest. Maybe Holmes and her beau Billy Evans were planning to kick it for an extended stay south of the border to celebrate. Seems pretty dumb and attention-grabbing to buy a one-way ticket if your plan is to go on the lam.
Bad Blood is indeed a good, and thoroughly astonishing read! George Schultz and Henry Kissinger were snookered, among other things.
They were on her board. Notably, her board did not have a single person with blood testing experience.
For those who prefer visual learning, Hulu has a docu-series and HBO a documentary about Holmes. Although I have read and enjoyed Bad Blood, I found both of them to be enjoyable. The Hulu series tends to emphasize the dramatic, and as is often the case with such series, at times becomes rather speculative. The HBO film is, I think, somewhat better, in that it is a true documentary, relying on interviews of the actual participants. It traces the routes of “fake it until you make it” strategies back to Thomas Edison and shows Holmes’ pathology showing through in her own words. Both make the streaming subscriptions required worthwhile.
Looks like there is a god after all.
As it turns out… I know some of her early investors. They defended her for a while. Not anymore. I defended her (and to some extent still do). She could have produced a useful machine that provided limited, but valuable results. Such a success would have made her very rich and very obscure. Instead she claimed that her machine (which did not really exist) did everything (nothing is more like it) and ended up in deep legal trouble. She wanted to be the next Jobs and ended up in jail instead. A sad story.
Not a sad story but a just one. She’s a perfect example of Silicon Valley thinking – that dropping out of college (Stanford) and launching your own billion dollar company like Bill Gates is easy. Actually, you’d better be awfully brilliant to pull off that move and she wasn’t. She was just faking it to make it and like a typical psychopath, would do anything to succeed – lie, steal, fake her voice, manipulate others and when caught, was astonished she would be held accountable.
As a scientist myself, I love seeing scientific charlatans get outed and humiliated. They discredit the scientific endeavor itself (and can actually harm others with their fraudulence) by implying all that fancy book learnin’ and commitment to advanced study that we do is a waste of time. I can’t wait to see baritone Barbie behind bars.
As a entrepreneur myself, I love seeing entrepreneur charlatans get outed and humiliated. They discredit the entrepreneur endeavor itself (and can actually harm others with their fraudulence) by implying that the fake-it-till-you-make-it ethos is typical of Silicon Valley and not a media myth.
Jimbo, although not directly related, your comment brings to my mind how the media has often characterized Theranos as typical of Silicon Valley.
I contend that Theranos is not typical of the Valley. I submit for evidence the names of the investors and board of directors. Holmes shopped her idea widely amongst the Valley VC community and none invested who were not somehow connected to her family. She then proceeded to stuff her board with famous people who were incapable of any kind of oversight, financial, managerial or otherwise. Those shiny objects (known as board members) just burnished her public image which she and the fawning mainstream media (Vogue, NYT, Vanity Fair, Forbes, Fortune, New York Times Style Magazine, Inc) further curated through fashion/lifestyle puff pieces.
Holmes also ensured no one was hired with deep regulatory or compliance expertise related to the FDA or CMS. Otherwise, questions would be raised.
MedTech is indeed a special case where, unlike most High Tech, bugs don’t harm people. So extra care must be taken.
PS: I never heard Holmes called the baritone Barbie. That’s perfect.
Point taken. I lived in SF and near Silicon Valley and it is a strange culture and not just media myth. My point is not that Theranos was a “typical” silicon valley startup but that Holmes patterned herself after Steve Jobs to create a personality cult.
The one way ticket is such an odd thing to do, big red flag and has maybe cost her in this hearing.
If I was going to flee I’d pay the extra for a return ticket…you don’t have to get on the plane to come back!
And that’s why I think it’s odd, was she really just trying to save a few hundred bucks?
I think I made a comment here the other day – after some thought and reading, I hope it doesn’t appear – but if I got banned for it, I’d like to put in a plea to forgive the comment.
Apologies.
(If the poorly formed comment appears, I’ll just have to explain myself – but hopefully it never does).