Elizabeth Holmes Denied Appeal, Ordered to Pay $452 Million in Restitution

Disgraced Theranos founder Elizabeth Holmes won’t be taking any more photos walking by the beach. The Ninth US Circuit Court of Appeals on Tuesday denied her bail application.

Holmes was found guilty of defrauding investors, to whom she made promises of a groundbreaking blood-testing technology that failed to materialize. In November, she was sentenced to 11 years and 3 months in prison for three counts of wire fraud.

The former Silicon Valley star asked the Ninth US Circuit Court to pause her sentence on April 25, two days before she was set to report to prison. Her lawyers requested for Holmes, who recently gave birth to her second child, to be able to stay out of prison while the appeal is in process.

Her lawyers are appealing her conviction on grounds of alleged mistakes and misconduct that occurred during her trial.

But on Tuesday, the Ninth Circuit ruled that she can’t stay out of prison pending the appeal as her appeal does not raise “substantial question” on how the conduct of the trial would result in a reversal of her conviction or a sentence shorter than the one given by US District Judge Edward Davila.

Davila also previously denied a request for a new trial, in light of “newly discovered” evidence, shortly before he handed down Holmes’ sentence. He ruled that the arguments brought forward by the Theranos founder’s lawyers for a new trial did not have enough merit to prove allegations of government misconduct, and the statements that the lawyers were referring to as newly discovered evidence were not material to result in an acquittal.

As of this writing, a new reporting date for her prison sentence has not yet been set.

Time for Restitution

More bad news for Holmes, as well as her former lover and Theranos’ president and COO Ramesh “Sunny” Balwani who already started his 13-year sentence in April. The two were jointly ordered by a lower court on Tuesday to pay a sum of $452 million in restitution to investors. Among the investors on the list are media mogul Rupert Murdoch, who is entitled to $125 million, Walgreens with $40 million, and Safeway with $14.5 million.

Court filings show that prosecutors had previously sought for more than $800 million. Theranos was once valued at $9 billion at its peak.

Information for this story was found via the Wall Street Journal, The Guardian, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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