Elizabeth Holmes Reports To Prison To Serve 11-Year Sentence
Elizabeth Holmes, the founder of Theranos, has reported to prison in Texas after being found guilty of fraud in November 2022. She is facing an 11-year prison sentence. Theranos first rose to headline status as a company that claimed it had a very compact blood testing device that would supposedly revolutionize medical science. As it turns out, Theranos wasn't even using its own devices to test blood in many instances and was instead allegedly using other testing methods. In short, it was deemed to be fraud and Theranos went under in 2018.
#More: This is Elizabeth Holmes arriving to begin her 11 year prison sentence: pic.twitter.com/iN4rJxueOB
— scott budman (@scottbudman) May 30, 2023
The company, and Holmes herself as well as co-founder Ramesh Balwani, have been in the public's crosshairs since as early as 2015 when The Wall Street Journal released a lengthy report on the company. In that report, the publication alleged that there was something fishy with how Theranos conducted business and that it was not forthcoming with how it conducted blood tests nor how its device was used.
Holmes' appeals process will continue from prison
In 2018, the Securities and Exchange Commission released a statement alleging that Theranos and its founders had raised upwards of $700 million using what the agency claimed was "an elaborate, years-long fraud in which they exaggerated or made false statements about the company's technology, business, and financial performance." Prior to her downfall, Holmes had a net worth of around $4.5 billion.
The company had also fraudulently claimed that it had the blessing of not only the United States military but several large healthcare and pharmaceutical companies, according to the SEC's statement in 2018. Making claims like that without any basis in reality to hype up investors and keep the cash flowing in is what legal experts and lawmakers may call "very illegal."
As SlashGear reported in November, the courts found that the guilty party should be responsible for paying back $121 million in restitution in addition to the 11-year jail sentence. As with any conviction in the United States, this comes with an inevitable appeal by Holmes, meaning that this case is far from over even as she gets ready for a stay in federal prison. Holmes had previously asked the court to delay the start of her sentence while the appeal process was underway, but was denied the request.