Theranos founder Elizabeth Holmes returned to court on Friday for a hearing to determine whether she can delay her 11-year prison sentence pending appeal and avoid paying hundreds of millions of dollars to the victims of her massive fraud.
After nearly 90 minutes of oral arguments, U.S. District Judge Edward John Davila did not issue a ruling, indicating that he will later file a written order.
In 2015, Holmes became the talk of Silicon Valley when Forbes declared that her company Theranos had made her the youngest and wealthiest self-made billionaire. Theranos claimed to have revolutionized blood testing, through a patented so-called nanotainer that only required a pinprick to function. The invention never worked, but Holmes persuaded patients and investors that it did, netting her company a $9 billion valuation at its height.
The Wall Street Journal’s John Carreyrou pierced Holmes’ carefully curated PR gloss in a series of articles that culminated in the book “Bad Blood: Secrets and Lies in a Silicon Valley Startup.” The HBO documentary “The Inventor” featured the author.
Holmes’ prosecution followed the exposure, and her attorneys argue that under the international glare, their client always placed her faith in the court system.
“Ms. Holmes is not, and has never been, a flight risk,” her attorney Amy Mason Saharia wrote in a 20-page motion for release pending appeal. “The government has never sought her detention either pre- or post-conviction. It has her passport, she has been in contact with pretrial services throughout this case, she has two young children and family support in the United States, and her bail is secured by her parents’ only home. Nor is Ms. Holmes a physical or financial danger to the community.”
Prosecutors claim that isn’t quite true. The government says it learned that Holmes booked a one-way ticket to Mexico in January 2020, just weeks after her convictions.
“Only after the government raised this unauthorized flight with defense counsel was the trip canceled,” prosecutors added.
Holmes’ legal team insisted that it was a misunderstanding.
“The hope was that the verdict would be different and Ms. Holmes would be able to make this trip to attend the wedding of close friends in Mexico,” her attorney Lance Wade told prosecutors at the time. “Given the verdict, she does not plan to take the trip — and therefore did not provide notice, seek permission, or request access to her passport (which the government has) for the trip.”
The government suggested that Holmes’s continuing bid to stay out of prison stems from her sense of impunity.
“There are not two systems of justice — one for the wealthy and one for the poor — there is one criminal justice system in this country,” the government wrote earlier this year.
In addition, Holmes hopes that U.S. District Judge Edward John Davila will not force her to pay $803,840,309 in restitution. Her defense team argues that the court should decline to impose any restitution because she says the government has “no factual or legal basis to conclude that the offense conduct was the proximate cause of the claimed investor losses.”
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