Elizabeth Holmes’s bad blood with the U.S. legal system will continue.
The disgraced founder of Theranos will have to go to prison while she appeals her fraud conviction, The Wall Street Journal reported on Tuesday. Additionally, she and her former business partner Ramesh “Sunny” Balwani must jointly pay $425 million in restitution to investors.
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Holmes, who ran the blood-testing start-up Theranos, was initially convicted of wire fraud and conspiracy to commit wire fraud in January 2022. She was ordered to serve more than 11 years in prison, and her sentence was scheduled to begin on April 27. However, Holmes asked to remain free while her appeal is considered, a request that the appeals court denied on Tuesday. A new reporting date hasn’t yet been set for Holmes, but the district court did recommend that she serve her time at a federal prison in Bryan, Texas, that allows family visitations (Holmes has a partner and two young children.)
Beyond serving time, Holmes and Balwani are on the hook for $425 million. (Balwani has been serving an almost 13-year sentence at a federal prison in San Pedro, California. The appeals court similarly denied his request to remain free while he appeals his own conviction.) That’s a little more than half of the $800 million the federal government had previously asked for, according to court filings reviewed by the WSJ.
Jeff Coopersmith, Balwani’s lawyer, told the newspaper that he and his client “respectfully disagree with the district court’s restitution order, but even more fundamentally, the guilty verdict.” (A lawyer for Holmes didn’t respond to The Wall Street Journal’s requests for comment, while a spokesperson for the government declined to comment.)
Theranos was founded in 2003 by Holmes, with Balwani acting as the company’s chief operating officer. It claimed to have invented blood tests that used just small amounts of blood to provide rapid and accurate results—but those promises were later proved to be false. While at one point worth $4.5 billion, Holmes’s net worth plummeted to almost nothing after the truth of Theranos came to light.
Now, as Holmes works to overturn her conviction, she’ll have to do so from behind bars.