Court Rejects Elizabeth Holmes’ Plea To Avoid Prison During Appeal

Topline

A federal appellate court Tuesday rejected Theranos founder Elizabeth Holmes’ request to stay out of prison while she appeals her fraud conviction, in the latest legal blow to the former billionaire who faces more than 11 years in prison.

Key Facts

In its ruling, the federal Ninth Circuit appeals court said Holmes’ plea had failed to raise a “substantial question” of law.

The ruling also notes even if she were to win her appeal, it is unlikely she would have her conviction overturned or be able to avoid a prison sentence entirely.

In a separate ruling Tuesday, the Northern District of California federal court ordered both Holmes and her former deputy Ramesh “Sunny” Balwani to pay a total of $452 million in restitution to investors affected by their “fraud conspiracy.”

The investors in question include media mogul Rupert Murdoch, Walgreens, Safeway, Peer Ventures Group, and RDV Corporation, among others.

Murdoch is entitled to receive nearly $125 million—the largest among all the investors named—in restitution from the two former Theranos executives.

What To Watch For

Holmes was scheduled to begin serving her sentence on April 27 but the appellate court’s hearing of her plea to stay out of prison delayed this. It is unclear when Holmes will be asked to report to prison as the Ninth Circuit’s ruling makes no mention of it.

Key Background

Tuesday’s ruling largely mirrors California federal court Judge Edward Davila’s rejection of Holmes’ appeal last month. Davila noted that the former Theranos chief had failed to show that her appeal would lead to a reversal of the fraud conviction or a complete retrial. Davila had previously sentenced Holmes to 11 years and three months in prison after a jury found her guilty of three counts of wire fraud and one count of conspiracy to defraud investors. Federal prosecutors have repeatedly expressed opposition to Holmes’ requests to remain out of prison, warning she is a flight risk.

Further Reading

Theranos Founder Elizabeth Holmes’s Request to Stay Out of Prison Denied (Wall Street Journal)

Judge Rejects Elizabeth Holmes’ Plea For Freedom While She Appeals Her Fraud Conviction (Forbes)