SAN JOSE, Calif. (AP) — Disgraced Theranos CEO Elizabeth Holmes made her final court appearance Friday before beginning an 11-year prison sentence unless a judge grants her request to remain free as her lawyers appeal her conviction for planning a blood test scam.
The 90-minute hearing was held four months after Holmes’ last court appearance. At the time, U.S. District Judge Edward Davila sentenced him 20 years ago for defrauding the investors of the Theranos startup he founded and achieved fleeting fame and fortune thanks to his promises of revolutionary blood testing technology.
Before the hearing began, a man in the audience in a San Jose, California, courtroom tried to approach the table where Holmes was sitting, carrying a document in his hand. Security officials quickly stopped him and forcibly removed him. Holmes didn’t seem fazed by the disruption.
The trial ended without a decision on whether Holmes, 39, can stay out of jail while his appeal is heard or surrender to authorities on April 27, as currently scheduled. Davila hopes to make his decision in early April.
A judge earlier this month rejected a similar offer to avoid prison for Holmes’ ex-lover and convicted Theranos co-conspirator Ramesh “Sunny” Balwani, who faces a nearly 13-year sentence after a jury found him guilty of 12 counts of fraud and conspiracy. Balwan, 57, was scheduled to report to a federal prison in Southern California on Thursday, but his attorney used a last-minute legal maneuver to get more time..
Holmes arrived for her St. Patrick’s Day sessions wearing a black blazer and blue skirt. She recently gave birth to her second child, according to court documents, which did not provide a gender or date of birth.
One of his attorneys, Amy Saharia, argued that Holmes should be allowed to remain free because of numerous errors in the presentation and omission of evidence during his four-month trial, making it likely that an appeals court will overturn his conviction on four counts of fraud. and conspiracy.
“We believe the record is full of problems,” Saharia asserted. He specifically pointed to Davila’s refusal to let the jury see a statement Balwan made during the Securities and Exchange Commission’s investigation into the collapse of Theranos, which Holmes’ defense team believes could help exonerate him.
Federal prosecutor Kelly Volkar argued against the likelihood of overturning Holmes’ conviction, arguing that the trial documented seven different classes of fraud he engaged in while running Theranos. Most of the hoax centered on a device Holmes bragged about called the “Edison” that could look for hundreds of diseases and other health problems with just a few drops of blood taken from a finger prick.
But Edison produced such wildly unreliable results that Theranos began relying on third-party testing equipment that was already widely used on the market — a switch that Holmes hid to try to keep the company afloat.
“It was shocking to the investors,” Volkar reminded Davila.
The opposing sides also debated how much Holmes should pay defrauded investors whose trust briefly boosted his fortune to $4.5 billion, based on Theranos’ peak value before it collapsed.
Federal prosecutor Robert Leach based his conviction on the conspiracy’s rightful return of nearly $900 million to repay Theranos investors who bought into his lies. “Applying common sense, the money these investors lost is the money they invested,” Leach said.
But Hollmes’ lawyer, Patrick Looby, countered that prosecutors were way off base by seeking an “all or nothing” compensation amount. He pointed out that the jury in his trial failed to reach a verdict on three counts of investor fraud, which is why the prosecution dismissed the charges. At most, Looby argued, Holmes’ punitive damages should be limited to the handful of investors who testified at his trial.