Elizabeth Holmes, the founder and former chief executive of Theranos, a blood-testing startup that collapsed amid revelations of its fraudulent technology, reported to a federal prison in Texas on Tuesday to begin serving an 11-year sentence for her role in the scam.
Holmes, 39, was convicted in January on four counts of fraud and conspiracy for misleading investors, patients and regulators about the capabilities of Theranos’s devices, which she claimed could diagnose hundreds of diseases with just a few drops of blood. She was sentenced in November by Judge Edward Davila of the U.S. District Court in San Jose, Calif., who also ordered her to pay $452 million in restitution to investors.
Holmes had sought to delay the start of her prison term while she appealed her conviction, but the Ninth Circuit Court of Appeals denied her request last week, ruling that she had not raised a “substantial question” of law or fact about her case.
She is expected to serve her time at a minimum-security prison camp in Bryan, Texas, located about 100 miles from Houston, where some of her family members reside. The facility offers programs such as training Labrador puppies for work as service dogs and working in the kitchen for 12 cents an hour.
Holmes leaves behind two young children — a son born in July 2021, a few weeks before the start of her trial, and a daughter who was conceived after the jury verdict. The children’s father is William “Billy” Evans, a hotel heir whom Holmes met in 2017, around the same time she was under investigation for the downfall of Theranos.
Holmes founded Theranos in 2003, when she was 19 and a dropout from Stanford University. She envisioned a technology that could revolutionize health care by making blood tests cheaper, faster and more accessible. She raised nearly $1 billion from prominent investors such as media mogul Rupert Murdoch and former Education Secretary Betsy DeVos, and assembled an influential board of directors that included former presidential cabinet members George Shultz, Henry Kissinger and James Mattis.
She also became a Silicon Valley sensation, with Forbes magazine naming her “the world’s youngest self-made female billionaire” and Inc magazine calling her “the next Steve Jobs.” She adopted Jobs’s signature black turtleneck and deepened her voice to project authority.
But her empire crumbled after The Wall Street Journal exposed serious flaws and inaccuracies in Theranos’s technology in 2015. The company faced lawsuits, sanctions and investigations from various authorities, and eventually shut down in 2018.
Holmes and her former co-executive and lover Sunny Balwani were charged with multiple counts of fraud and conspiracy by the U.S. Justice Department. Balwani was convicted on all 12 counts brought against him in July 2022 and sentenced to 12 years and 11 months in prison in December 2022.
During her trial, Holmes admitted making mistakes but denied committing crimes. She also accused Balwani of emotionally and sexually abusing her during their relationship, impairing her mental state. Balwani denied the allegations as “outrageous.”
“This is what happens when you work to change things,” Holmes said at a conference in 2015. “First they think you’re crazy, then they fight you, and then all of a sudden you change the world.”
But instead of changing the world, Holmes ended up behind bars. As Acting U.S. Attorney Stephanie Hinds said after Holmes’s conviction: “This trial has revealed how innovation can be corrupted by greed and falsehoods.”
– The day has arrived for Elizabeth Holmes to report to a Texas prison, Associated Press, May 30, 2023
– Elizabeth Holmes Set to Report to Prison to Begin More Than 11-Year Sentence, The New York Times, May 30, 2023
– Elizabeth Holmes to report to prison today for 11 year Theranos fraud sentence, AL.com, May 30, 2023
– What to know as Elizabeth Holmes starts her 11-year prison sentence, NPR, May 30, 2023