Elizabeth Holmes returns to court to avoid prison
SAN JOSE, Calif. (AP) — Disgraced Theranos CEO Elizabeth Holmes appeared Friday in what could be her final trial before she began an 11-year prison sentence unless a judge grants her request to remain free while her lawyers are in custody. appeal against her conviction for the mastermind behind a hoax for blood tests.
The 90-minute hearing came four months after Holmes’ last hearing. That was when U.S. District Judge Edward Davila sentenced her for defrauding investors in Theranos, a startup she founded 20 years ago and achieved fleeting fame and fortune with her promises of a revolutionary blood testing technology.
Before the hearing began, a man in the audience in the San Jose, California, courtroom attempted to approach the table where Holmes sat while carrying a document in his hand. He was quickly intercepted by security agents who forcibly removed him. Holmes didn’t seem upset by the outage.
The proceedings ended without determining whether Holmes, 39, can stay out of jail while her appeal unfolds, or surrender to authorities on April 27, as currently scheduled. Davila said he hopes to make his ruling in early April.
The judge rejected a similar offer earlier this month to avoid prison imposed by Holmes’s former lover and convicted Theranos accomplice, Ramesh “Sunny” Balwani, who faces nearly 13 years in prison after a jury found him guilty of 12 counts of fraud and conspiracy. Balwani, 57, was scheduled to report to a federal prison in Southern California on Thursday, but his lawyer used a last-minute legal maneuver to buy more time.
Holmes showed up to her hearing on St. Patrick’s Day in a black blazer and blue skirt. She recently gave birth to her second child, according to court documents that did not disclose gender or date of birth.
One of her attorneys, Amy Saharia, argued that Holmes should remain free due to several missteps in presentation and the omission of evidence during her four-month trial, making it likely that an appeals court would overturn her conviction on four counts of fraud. will destroy. and conspiracy.
“We think the record is riddled with problems,” Saharia claimed. She specifically cited Davila’s refusal to show the jury an affidavit Balwani gave during a Securities and Exchange Commission investigation into the demise of Theranos, which Holmes’s defense team believes would have helped exonerate her .
Federal prosecutor Kelly Volkar countered that there is “no likelihood of Holmes’ conviction being overturned,” claiming that the trial documented seven different categories of deception she engaged in while running Theranos. Most of the deception centered on a device called “Edison” that Holmes had boasted would be able to scan for hundreds of diseases and other health problems with just a few drops of blood drawn with a finger prick.
But the Edison produced such wildly unreliable results that Theranos began relying on third-party testing equipment that was already widely used in the market—a switch Holmes hid in an effort to keep the company afloat.
“That was shocking to investors,” recalls Volkar Davila.
The two opposing sides also squabbled over how much restitution Holmes should pay to defrauded investors whose trust briefly boosted her wealth to $4.5 billion based on Theranos’ pre-collapse peak value.
Federal prosecutor Robert Leach argued that her conviction for masterminding a conspiracy justified the restitution of nearly $900 million to repay Theranos investors who had been swept up in her lies. “Just to apply common sense, the money these investors lost is the money they put in,” Leach said.
But Hollmes’ attorney, Patrick Looby, countered that prosecutors were way off base in pursuing an “all or nothing” restitution amount. He noted that the jury was unable to reach a verdict on three cases of investor fraud in its trial, prompting the district attorney to dismiss those charges. Looby argued that Holmes’s restitution fine should, at most, be limited to the handful of investors who testified at her trial.