Former Theranos CEO Elizabeth Holmes leaves federal court in San Jose, Calif. on March 17, 2023. (AP)
This Memorial Day marks the last day of freedom for Elizabeth Holmes, before she begins an 11-year prison sentence for perpetrating a massive fraud through her multibillion-dollar tech startup, Theranos.
There is no parole in the federal prison system, but Holmes may be entitled to so-called “good time” credit and further relief under the First Step Act, a criminal justice-reform legislation signed by former President Donald Trump.
Holmes founded the Silicon Valley startup company Theranos, which claimed to have developed a revolutionary method to perform blood testing with an amount as small as a finger prick. The enterprise had a $9 billion valuation at its height and counted the likes of News Corp chairman Rupert Murdoch, former Secretary of State Henry Kissinger, and Oracle founder Larry Ellison as investors. She and her accomplice Ramesh “Sunny” Balwani would eventually owe Murdoch more than $124 million for defrauding him, but before that, Holmes would reach unknown heights of wealth for a young businesswoman.
In 2015, Forbes ranked Holmes the youngest and wealthiest self-made billionaire.
Fawning press coverage about the budding entrepreneur gave way to probing investigations about the now-convicted swindler. The Wall Street Journal published an investigative series that culminated in its reporter John Carreyrou’s book “Bad Blood: Secrets and Lies in a Silicon Valley Startup,” which HBO later used for a documentary.
Hit with a massive indictment, Holmes stood trial inside a federal courthouse in California, where a jury broadly agreed that fraud lay at the heart of her enterprise. Since her prosecution, Holmes has become a mother of two, and she sought leniency to raise her children. U.S. District Judge Edward Davila dealt her a more than decade-long sentence and initially ordered her to report to prison in late April. That date was automatically delayed after Holmes sought a stay pending appeal, which she lost. (The Ninth Circuit will consider the merits of her appeal at a later date.) After that defeat, Davila agreed to a brief reprieve for Holmes to attend to “medical and child-care arrangements” before her prison term begins.
In a separate ruling earlier this month, Davila issued a $452,047,268 restitution order against Holmes and Balwani, her ex-boyfriend, co-conspirator and ex-Theranos chief operating officer. Holmes claimed during her trial that Balwani was abusive, and the COO ultimate received a harsher sentence than she did — nearly 13 years in prison.
Balwani, 57, is now incarcerated at Federal Correction Institute Terminal Island, a low-security facility based in San Pedro, California.
Holmes, 39, is expected to report to Federal Prison Camp Bryan in Texas, another law security facility whose rules include 6 a.m. wake-up calls and sub-minimum wage labor, according to Insider. The Wall Street Journal reported that inmates there are already anticipating her arrival, with one telling the paper: “Some people are like, ‘I want to be her friend.’”
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Elizabeth Holmes reports to prison day after Memorial Day