Elizabeth Holmes loses latest bid to avoid prison and gets hit with £362.6m bill

Disgraced Theranos boss Elizabeth Holmes looks set for prison after an appeals court rejected her bid to remain free as she tries to overturn her conviction in a blood-testing hoax that brought her fleeting fame and fortune.

In another ruling issued late on Tuesday, US district judge Edward Davila ordered Holmes to pay 452 million US dollars (£362.6 million) in restitution to the victims of her crimes.

Holmes is being held jointly liable for that amount with her former lover and top Theranos lieutenant, Ramesh ‘Sunny’ Balwani, who is already in prison after being convicted on a broader range of felonies in a separate trial.

The Ninth Circuit Court of Appeals decision on Holmes’s attempt to avoid prison comes nearly three weeks after she deployed a last-minute legal manoeuvre to delay the start of her 11-year sentence.

She had been previously ordered to surrender to authorities on April 27 by Mr Davila, who sentenced her in November.

Mr Davila will now set a new date for Holmes, 39, to leave her home in the San Diego area and report to prison.

The punishment will separate Holmes from her current partner, William ‘Billy’ Evans, their one-year-old son, William, and three-month-old daughter, Invicta.

Holmes’s pregnancy with Invicta — Latin for “invincible” or “undefeated” — began after a jury convicted her on four counts of fraud and conspiracy in January 2022.

Mr Davila has recommended that Holmes serves her sentence at a women’s prison in Bryan, Texas.

It has not been disclosed whether the federal Bureau of Prisons accepted Mr Davila’s recommendation or assigned Holmes to another facility.

Balwani, 57, began a nearly 13-year prison sentence in April after being convicted on 12 counts of fraud and conspiracy last July. He was incarcerated in a Southern California prison last month after losing a similar effort to remain free on bail while appealing his conviction.

The verdict against Holmes came after a 46-day trial which cast a spotlight on a culture of greed and hubris that infected Silicon Valley as technology became a more pervasive influence on society and the economy during the past 20 years.

The trial’s most riveting moments unfolded when Holmes took to the witness box to give evidence in her own defence.

Besides telling how she founded Theranos as a teenager after dropping out of Stanford University in 2003, Holmes accused Balwani of abusing her emotionally and sexually.

She also said she never stopped believing Theranos would revolutionise healthcare with a technology that she promised would be able to scan for hundreds of diseases and other potential problems with just a few drops of blood.

While pursuing that audacious ambition, Holmes raised nearly one billion dollars (£800 million) from a list of well-heeled investors which included Oracle co-founder Larry Ellison and media mogul Rupert Murdoch.

Those sophisticated investors all lost their money after a Wall Street Journal investigation and regulatory reviews exposed dangerous flaws in Theranos’s technology.

In his restitution ruling, Mr Davila determined that Holmes and Balwani should pay Murdoch 125 million dollars (£100.3 million) – by far the most among the investors listed in his order.

The restitution also requires the co-conspirators in the Theranos scam to pay 40 million dollars (£32.1 million) to Walgreens, which became an investor in the startup after agreeing to provide some of the flawed blood tests in its pharmacies in 2013.

Another 14.5 million dollars (£11.6 million) is owed to Safeway, which also agreed to be a Theranos business partner before backing out.

In separate hearings, lawyers for Holmes and Balwani tried to persuade Mr Davila their respective clients should be required to pay little, if anything.

Prosecutors had been pushing for a restitution penalty in the 800 million dollar (£641.7 million) range.

Both Holmes — whose stake in Theranos was once valued at 4.5 billion dollars (£3.6 billion) — and Balwani — whose holdings were once valued around 500 million dollars (£401.1 million) — have indicated they are nearly bankrupt after running up millions of dollars in legal bills while proclaiming their innocence.

Holmes’s lawyers have been fighting her conviction on grounds of alleged mistakes and misconduct during her trial.

They also said errors and abuses that biased the jury were so egregious she should be allowed to stay out of prison while the appeal unfolds — a request that has now been rebuffed by both Mr Davila and the Ninth Circuit Court of Appeals.