Theranos Founder Elizabeth Holmes Denied in Fraud Appeal
Elizabeth Holmes, the founder and former CEO of the blood-testing startup Theranos, has not succeeded in her appeal against her conviction for defrauding investors. In 2022, she was found guilty of fraud and conspiracy for misleading people about the company’s financial situation and the effectiveness of its technology. Holmes was sentenced to more than 11 years in prison because of these charges.
In her appeal, Holmes argued that some evidence and testimony presented during her trial were not fair. She particularly pointed to statements made by Ramesh “Sunny” Balwani, who was both her business partner and former romantic partner. She claimed that Balwani’s comments about his responsibility for Theranos’ financial model should have been included in her trial. Balwani was sentenced to over 12 years in prison after being found guilty of similar charges, including defrauding patients.
The Ninth Circuit Court of Appeals, however, did not accept Holmes’s arguments and rejected her appeal. Judge Jacqueline H. Nguyen, who led the three-judge panel, clearly stated in the court’s opinion that Theranos’s claims about being able to conduct blood tests using just a drop of blood from a finger prick were untrue and deceptive. She described these claims as “nothing more than a mirage” and stated that the impressive accomplishments claimed by Holmes and Balwani were mostly exaggerated truths and outright lies.
Despite Holmes’s attempt to challenge the facts presented in her trial, the court confirmed that her conviction was valid. She was found guilty of deceiving investors about how well the company was performing and the real capabilities of its technology. Balwani, who faced separate charges, was also convicted of fraud related to deceiving patients about Theranos’s tests.
Both Holmes and Balwani contested the requirement to pay $452 million in restitution to those they defrauded, but the court upheld that decision. In her appeal, Holmes insisted that Balwani’s claims about owning the financial model of Theranos should have been factored into her case, yet the court dismissed this argument along with others she raised. She also pointed out that testimonies from former Theranos employees and reports from government investigations should not have been used as evidence, but these claims were again rejected by the judges.
At one point, Theranos was highly valued at about $9 billion, attracting significant investments and attention in the startup world. However, in late 2015, reports began to emerge about serious issues within the company, highlighting the limitations and failures of the technology they promoted. Following a lengthy investigation that lasted around two and a half years, both Holmes and Balwani were indicted, which ultimately led to their convictions and lengthy prison sentences.
As a result of her conviction, Holmes began serving her prison sentence in Texas in 2023. The outcome of her appeal reinforces the judicial decision that deemed her actions as fraudulent and deceptive, significantly affecting the investors and patients who trusted her company’s claims.
