Elizabeth Holmes who founded the health tech company Theranos in 2003, has been ordered by a court in San Francisco to start serving in prison for 11 years starting from May 30.
The court has recommended Holmes serve her time behind bars at a federal minimum-security women’s prison in Bryan, Texas.
In a separate ruling, US District Judge Edward Davila also ordered Holmes to pay $452m (£364m) to victims.
She was originally sentenced to 11 years in prison last year after a jury found her guilty of defrauding investors, and had to start serving in prison from April 27th but was able to delay the date by asking the Ninth Circuit Court of Appeals to delay her sentence days.
According to BBC, Holmes will split the multi-million dollar payment with her former romantic and business partner, ex-Theranos boss Ramesh “Sunny” Balwani.
Balwani was sentenced to 13 years in prison after being convicted on 12 counts of fraud and conspiracy last year. He began serving his sentence in April after losing his own attempt to remain free while appealing against his conviction.
Theranos – Brief background
Theranos was a healthcare technology company founded by Elizabeth Holmes in 2003 after dropping out of Stanford University. The company claimed to have developed a revolutionary blood-testing technology that could conduct a wide range of tests using just a few drops of blood. However, in 2015, serious allegations were raised against Theranos, questioning the accuracy and reliability of its technology.
Investigations and legal actions followed, revealing significant issues and discrepancies within the company. It was discovered that Theranos’ technology was not as advanced as claimed, and the majority of the blood tests were actually being performed using traditional commercial equipment. The company and its founder, Elizabeth Holmes, were accused of misleading investors, doctors, and patients about the capabilities and reliability of their technology.
In 2018, the U.S. Securities and Exchange Commission (SEC) charged Theranos and Holmes with “massive fraud.” Holmes settled with the SEC, agreeing to pay a fine and relinquishing her control of the company. In 2019, she was indicted on criminal charges, including wire fraud and conspiracy to commit wire fraud. Her trial began in 2021 and is ongoing as of my knowledge cutoff in September 2021.
The downfall of Theranos and the legal actions against Elizabeth Holmes have been widely covered by the media. The case has raised concerns about corporate governance, ethics in the healthcare industry, and the risks associated with venture capital-backed startups. It serves as a cautionary tale about the importance of transparency, integrity, and accurate representation of technology in the business world.