Theranos Founder Begins Prison Sentence

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Facts

  • On Tuesday, Elizabeth Holmes, founder of the disgraced blood-testing startup Theranos, was taken into custody to begin serving her 11-year prison sentence at a women’s prison camp in Bryan, Texas.1
  • Holmes was found guilty of four counts of wire fraud in January 2022, stemming from the blood lab she founded in 2003 at age 19. Her start-up, which drew valuations of more than $9B, received investments from many high-profile people, including Rupert Murdoch, the Walton family, and former US Secretary of Education Betsy DeVos.2
  • Theranos was a Silicon Valley darling until the Wall Street Journal reported that Holmes and her former love interest and business partner Ramesh Balwani had misled the public about the company’s capabilities.3
  • In 2018, the US Justice Department (DOJ) charged the couple with several crimes over their claims that Theranos’ technology could identify ailments with just a few drops of blood. Balwani is serving a 13-year sentence, while Holmes has appealed her conviction several times.4
  • Holmes and Balwani were also ordered to pay $452M in restitution to the donors they swindled, but Holmes claims she doesn’t have the money.5
  • Prior to Tuesday, Holmes had been out on bail and living in a $13K per month California estate with her two children and husband, Billy Evans. Holmes had her first child in July 2021 – delaying her trial – and gave birth to her second in November.6

Sources: 1CBS, 2NBC, 3Associated Press, 4WLOS, 5Yahoo Sports, and 6New York Post.

Narratives

  • Narrative A, as provided by New York Post. Holmes, one of the century’s biggest fraudsters, has shown little genuine remorse for her lies, but now she gets rewarded by getting to serve her sentence in a cushy prison “camp” with minimum security. Considering the severity of her crimes, Holmes got off easy.
  • Narrative B, as provided by NBC. Holmes is the latest victim of the US' unfair federal justice system, which is far too strict and arbitrary. There was no mandatory minimum sentence in this case, and she was over-sentenced for wire fraud convictions. This sentence is way more punitive than it is rehabilitative.