Elizabeth Holmes Begins Prison Term in Texas

Elizabeth Holmes Begins Prison Term in Texas wsjnewspaper

Texas—Elizabeth Holmes, the mastermind behind Theranos, commenced her prison term on Tuesday, embarking on an 11-year sentence for deceiving investors. This event signifies the culmination of the downfall of one of Silicon Valley’s most prominent entrepreneurs, following the exposure of her company’s unreliable blood-testing technology.

A spokesperson from the Bureau of Prisons verified that Elizabeth Holmes arrived at the Bryan correctional facility on Tuesday afternoon, accompanied by prison officials. Rhonda Rosales, a current inmate serving a 13-year sentence, revealed that parts of the prison were temporarily closed during Holmes’s arrival.

Inmates at the facility observed Holmes’s imprisonment unfold through news reports on CNN and local media. While some displayed excitement, others maintained a nonchalant attitude, recognizing her as a fellow human being.

Since The Wall Street Journal first published its exposé on Theranos in 2015, Holmes has faced convictions for wire fraud and conspiracy to commit wire fraud in federal court. Additionally, she settled civil securities-fraud charges brought by the Securities and Exchange Commission. As part of the settlement, Holmes paid a $500,000 fine and received a 10-year prohibition from holding any officer or director positions in public companies.

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At the age of 19, Holmes dropped out of Stanford University to establish Theranos. Now 39 years old, she resides with her partner, Billy Evans, and their two children under the age of 2. Alongside her 135-month prison term, Holmes and former Theranos executive Ramesh “Sunny” Balwani have been ordered to pay $452 million in restitution.

In January 2022, a California jury found Holmes guilty of defrauding investors, although the charges did not pertain to patients. Balwani, Holmes’s boyfriend and the individual in charge of the Theranos lab, faced conviction for defrauding both investors and patients.

Over a span of 15 years, Holmes led Theranos in an attempt to revolutionize the blood-testing industry. At its peak, the company garnered a valuation of over $9 billion, ranking as the 10th-largest venture-capital-backed startup at the time. Holmes claimed ownership of approximately half the company, amounting to a paper value of around $4.5 billion. However, the trial exposed a different reality.

Theranos could only utilize its finger-prick blood-testing device for a mere 12 types of patient tests, and the results were unreliable. The company secretly conducted most of its blood tests by utilizing commercial devices from other firms, some of which Theranos modified to function with small blood samples.

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In November, Holmes received her sentence. Shortly after being denied a new trial by U.S. District Judge Edward Davila, she filed an appeal. Despite her request to remain free during the appeal process, both Judge Davila and the U.S. Ninth Circuit Court of Appeals rejected her plea, citing the improbability of her conviction being overturned. Holmes’s legal team did not provide any comments on the matter.

The court directed Holmes to surrender herself to the Bureau of Prisons by 2 p.m. on May 30. The U.S. District Court in Northern California, where her criminal trial took place, recommended that she serve her term at the minimum-security all-female federal prison camp in Bryan, Texas.

Inmates at the Bryan facility had been discussing the possibility of Holmes’s arrival for months. Some expressed interest in befriending her, while others believed she deserved a lengthier prison sentence, according to Tasha Wade, another inmate.

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