Holmes was sentenced to more than 11 years in prison
A U.S. appeals court has upheld the conviction of Theranos founder Elizabeth Holmes, who is serving more than 11 years in prison for defrauding investors with false claims about her company’s blood-testing technology.
The 9th U.S. Circuit Court of Appeals in San Francisco upheld the fraud convictions, sentences and $452 million restitution order for Holmes and her second in command, Ramesh “Sunny” Balwani, who was sentenced to nearly 13 years in prison.
The two had argued the court committed several legal errors and violated their constitutional rights during their separate trials. The three-judge panel for the appeals court rejected their claims, finding that any errors were harmless or that their arguments failed to show any violation.
As part of their appeal, they also challenged the restitution, arguing the figure should not have been based on the investors’ total investments. The panel stood by the restitution awarded by the lower court, concluding the “victims’ actual losses were equal to the total amount of their investments.”
ABC News has reached out to their attorneys for comment on the appeals court’s decision.
Holmes, 41, was found guilty of four counts of investor fraud and conspiracy in January 2022 and sentenced to 135 months, or 11 1/4 years, in prison. She unsuccessfully fought to delay her incarceration.
The verdict followed a four-month trial that detailed Holmes’ trajectory from a Stanford University dropout in 2003 to a star business leader on the cover of Fortune magazine a little more than a decade later.
Her downfall began in 2015 amid investigations from journalists and regulators over the medical company’s faulty product, which claimed to provide accurate information from tests using just a few drops of blood.
Balwani, 59, the former romantic partner of Holmes and president of the now-defunct blood testing company, was convicted of fraud and conspiracy in July 2022 and sentenced to 155 months in prison.
The district court found that there were at least 10 victims in the case, a factor that enhanced the sentence for Holmes and Balwani. The two challenged this aspect of their sentencing in their appeal, arguing there was no evidence introduced at trial for five of the 10 investor victims. The appeals court found there was no basis to this claim while affirming their sentences.
Holmes and Balwani were also ordered to pay $452 million in restitution to those who suffered damage from the company’s fraud — including $125 million of that sum to media titan Rupert Murdoch, an investor in Theranos. Other victims in the case included the family of former Secretary of Education Betsy DeVos, and the Walton family, the founders of Walmart. Walgreens and Safeway, which had struck multimillion-dollar deals with Holmes to employ Theranos’ technology, were also included in a set of entities designated as victims deserving of restitution.
Holmes and Balwani argued the restitution should have been based on the diminution in value of the shares after the fraud came to light — and not, as was ordered, the money each victim invested.
The appeals court affirmed the original restitution, finding the victims were “never able to recover any amount of residual value that the stock may have retained,” and that their “inability to resell their shares would justify awarding them the full value of their investment.”
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