A U.S. appeals court has upheld the fraud convictions of Elizabeth Holmes and Ramesh “Sunny” Balwani, reaffirming their prison sentences and a $452 million restitution order to investors defrauded by their failed biotech company, Theranos.
The 9th U.S. Circuit Court of Appeals in San Francisco rejected Holmes and Balwani’s claims that legal errors and constitutional violations tainted their trials. The court determined that any potential errors were harmless and did not affect the verdict or sentencing.
Holmes’ and Balwani’s Legal Challenges Rejected
Holmes, 41, was convicted in January 2022 on four counts of investor fraud and conspiracy, leading to a 135-month prison sentence (11 years and 3 months). Despite multiple legal efforts to delay her incarceration, she began serving her sentence in May 2023.
Balwani, 59, was convicted separately in July 2022 and sentenced to 155 months (nearly 13 years) in prison. The court upheld their sentencing enhancements, citing at least 10 victims who suffered significant financial losses.
Theranos’ Investors and the $452 Million Restitution
The court also upheld the $452 million restitution order, rejecting Holmes and Balwani’s argument that it should be based on the diminished value of Theranos shares rather than the full amount invested. The ruling emphasized that victims were unable to recover any residual value from their investments.
Notable investors defrauded by Theranos include:
- Rupert Murdoch ($125 million)
- Betsy DeVos’ family
- The Walton family (Walmart heirs)
- Walgreens and Safeway, which had struck multimillion-dollar deals with Theranos
The Rise and Fall of Theranos
Holmes, once hailed as a visionary entrepreneur, dropped out of Stanford in 2003 and launched Theranos, claiming its blood-testing technology could deliver accurate results using just a few drops of blood. Her rise to fame landed her on the cover of Fortune magazine, but investigations in 2015 revealed the technology was deeply flawed.
Despite legal appeals, this latest ruling cements the final chapter of the Theranos scandal, ensuring Holmes and Balwani serve their full sentences while repaying defrauded investors.
Sources: Reuters, ABC, QZ, Bloomberg, FOX5.
