Elizabeth Holmes, the disgraced biotech entrepreneur, has finally arrived at a federal prison in Texas to begin her 11-year, three-month sentence for defrauding investors of her defunct blood-testing startup, Theranos. The press and photographers were stationed outside the women’s prison camp in Bryan, Texas, and captured what appeared to be Holmes exiting a gray SUV with New York state plates and making her way into the facility flanked by facility staff at around 12:30 pm local time.
Holmes will be joining about 655 female inmates who are required to work in the cafeteria or a manufacturing facility, with pay starting at $1.15 per hour. She will be donning prison-issued khaki pants and shirts in pastel green, gray, or white during her stay. She will have no Internet access but can buy a radio or an MP3 player from the prison commissary and listen to “non-explicit” music. When she’s not working or listening to prison-approved music, she can partake in leisure activities such as “table games” and arts and crafts.
In January 2022, Holmes was convicted on four counts of defrauding Theranos investors for falsely claiming that her propriety blood-testing device could run hundreds of tests with just a small drop of blood. The device never actually worked. Last November, the judge in her case, US District Judge Edward Davila, sentenced her to 11 years and three months in prison—a hefty term meant to send a message to Silicon Valley about the dangers of hubris and the “fake it till you make it” ethos.
Holmes is appealing her conviction, but the prospects of overturning it appear dim. She also requested to remain free on bail during the appeal process, a request denied by both Davila and a three-judge panel for the US Court of Appeals for the 9th Circuit, where she is appealing her conviction. On May 17, Davila ordered Holmes to report to prison today, May 30, no later than 2 pm.
Davila also ordered Holmes, along with her ex-boyfriend and former Theranos President, Ramesh “Sunny” Balwani, to pay $452 million in restitution to defrauded investors. The two, who were tried separately, are jointly responsible for paying back the sum. Balwani, who was convicted on 12 counts of defrauding investors, patients, and doctors, has already begun his nearly 13-year prison sentence.
Reporting to prison today, Holmes leaves behind two small children and their father, her new partner, Billy Evans. The couple reportedly have a boy, William, born in July 2021 and a three-month old daughter named Invicta, which is Latin for “invincible.” Holmes’ children can visit their mother in person on weekends and federal holidays. Holmes is allowed to hold them in her lap. They are also allowed phone and video calls, but calls are limited to 15 minutes each with a total of 300 minutes per month.
The Times notes that three women escaped FPC Bryan in 2017, one of whom has not been found. Let’s hope Holmes doesn’t follow in their footsteps.
On Sunday, former healthcare executive Elizabeth Holmes began her 11-year prison sentence in the Federal Medical Center in Fort Worth, Texas. Holmes is the founder and former CEO of the now-defunct healthcare startup Theranos, known for its fraudulent claims to revolutionize the blood testing industry.
In March of last year, Holmes was found guilty of two counts of conspiracy to commit wire fraud and nine counts of wire fraud. According to the Wall Street Journal, “The fraud involved deceiving investors, doctors and patients about the accuracy of Theranos’s technology”.
At its peak, Theranos was valued at more than $9 billion. Unfortunately, many investors, including Rupert Murdoch, were fooled into investing more than $700 million into the company. Holmes was charged with 11 felony counts in June 2018 and faced potential prison time of up to 20 years.
Holmes had been out on bail since she was first charged and was ordered to surrender on December 14, 2020. She wasted no time and reported to prison the next day. Though her sentence is set at 11 years, Holmes is eligible for release after 8.5 years if she shows good behavior.
In addition to serving time in prison, Holmes was also ordered to pay a $500,000 fine and is barred from participating in any penny stock offerings for 10 years. Though her sentence has been criticized by some as overly lenient, it provides a stark reminder that the consequences of fraud and deceit can be severe.
