Elizabeth Holmes fails to overturn her Theranos fraud conviction

SAN FRANCISCO (AP) — Elizabeth Holmes, the disgraced founder of Theranos, will remain in prison after losing a bid Monday to overturn her fraud conviction, with a federal appeals court saying she hadn’t proved there were legal missteps during her trial for defrauding investors with false claims of what her blood-testing startup could achieve.

The three-judge panel in San Francisco also upheld the fraud conviction of Holmes’ former business partner and lover Ramesh “Sunny” Balwani — as well as a lower’s court order for the two to pay $452 million in restitution.

Holmes was CEO throughout Theranos’ turbulent 15-year history, claimed her startup had developed a revolutionary medical device that could detect a multitude of diseases and conditions from a few drops of blood. But the technology never worked, and the claims were false.

A 41-year-old mother of two small children, Holmes began serving her 11-year sentence in May 2023 at a federal prison in Texas. Her listed release date at the Federal Bureau of Prisons is currently March 19, 2032.

Balwani, 59, was sentenced to nearly 13 years in prison in California for his role in the scam and is set to be released in 2033.

The pair alleged in their appeal that legal errors were committed during their separate trials in 2022 when the court allowed some testimony, including that of a former Theranos employee, and improperly prohibited other testimony.

Judge Jacqueline Nguyen rejected the claims, writing in the 54-page ruling that they failed to prove any violations or major errors by the lower court.

Attorneys for Holmes and Balwani did not immediately respond to emails seeking comment by The Associated Press.

Holmes saw a meteoric rise in Silicon Valley that landed her on the covers of business magazines that hailed her as the next Steve Jobs and raised nearly $1 billion in investments from software magnate Larry Ellison, media mogul Rupert Murdoch and the Walton family behind Walmart, and many others.

While wooing investors, Holmes leveraged a high-powered Theranos board that included former Defense Secretary James Mattis, who testified against her during her trial, and two former secretaries of state, Henry Kissinger and the late George Shultz, whose son, Alexander submitted a statement blasting Holmes for concocting a scheme that played Shultz “for the fool.”

The deception came to light in 2015 after a series of explosive articles in The Wall Street Journal and a regulatory audit of Theranos uncovered potentially dangerous flaws in the company’s technology, leading to its eventual collapse.

One of Silicon Valley’s biggest scandals, the pair's blood-testing hoax has been dissected in a book, an HBO documentary and an award-winning TV series.