Elizabeth Holmes returns to court in an attempt to avoid prison
SAN JOSE, Calif. (AP) — Disgraced Theranos CEO Elizabeth Holmes on Friday made what could be her last court appearance before starting an 11-year prison sentence, unless a judge upholds her sentence. her plea to remain free as her lawyers appeal her conviction for masterminding a blood test hoax.
The 90-minute hearing came four months after Holmes’ last court hearing. That’s when US District Judge Edward Davila convicted her of deceiving investors in Theranos, a startup she founded 20 years ago that has achieved fleeting fame and fortune thanks to its promises of a breakthrough analytics technology some blood.
Before the hearing began, a man in the audience in the San Jose, California courtroom tried to approach the table where Holmes was seated while holding up a document. He was quickly intercepted by security officers who forcibly removed him. Holmes seemed unfazed by the interruption.
The proceedings concluded without determining whether Holmes, 39, will be able to stay out of jail while her appeal is conducted or if she will have to turn herself in to authorities on April 27, as currently scheduled. Davila said she hopes to hand down her sentence in early April.
The judge earlier this month rejected a similar offer to avoid prison time made by Holmes’ former lover and Theranos’ convicted accomplice, Ramesh “Sunny” Balwani, who is facing a nearly 13-year sentence after a jury found him guilty of 12 counts of fraud and conspiracy. Balwani, 57, was due to appear in federal prison in Southern California on Thursday, but his attorney used a last-minute legal ploy to buy more time.
Holmes came to her St. Patrick’s Day hearing wearing a black blazer and blue skirt. She recently gave birth to her second child, according to court records that did not disclose her gender or date of birth.
One of her lawyers, Amy Saharia, has argued that Holmes should be allowed to go free because of various missteps in presenting and withholding evidence during her four-month trial that make it likely an appeals court will overturn her convicted of four counts of fraud. and conspiracy.
“We think the record is full of problems,” said Saharia. She specifically cited Davila’s refusal to allow the jury to see a sworn statement Balwani gave during a Securities and Exchange Commission investigation into the Theranos spill that Holmes’ defense team believes would help clear her.
Federal prosecutor Kelly Volkar countered that there is “no overturning” of Holmes’ conviction and said the trial documented seven different categories of deception she engaged in while running Theranos. Most of the deception centered around a device dubbed the “Edison” which Holmes boasted could scan hundreds of diseases and other health problems with just a few drops of blood taken from a finger prick.
But the Edison produced results so wildly unreliable that Theranos began relying on third-party test equipment already widely used on the market, a switch Holmes covered up in an effort to keep the company afloat.
“It was shocking for investors,” Volkar reminded Davila.
The two opposing sides also squabbled over how much Holmes should repay to defrauded investors whose trust briefly boosted her wealth to $4.5 billion based on Theranos’ peak value before its collapse.
Federal prosecutor Robert Leach argued that his conviction for masterminding a conspiracy warranted the return of nearly $900 million to repay Theranos investors engulfed in his lies. “Just to apply common sense, the money these investors lost is the money they invested,” Leach said.
But Hollmes’ attorney, Patrick Looby, countered that prosecutors were off base asking for an “all or nothing” restitution amount. He noted that the jury in his trial failed to reach a verdict on three counts of investor fraud, prompting the prosecutor to dismiss those charges. At best, Looby argued, Holmes’s sentence of restitution should be limited to the handful of investors who testified during his trial.
