A United States Court of Appeals has confirmed the conviction of the founder of Theranos, Elizabeth Holmes, who turns more than 11 years in prison for defrauding investors with false statements about the blood test technology of her company.
The 9th Court of Appeals of the United States Circuit in San Francisco confirmed fraud sentences, sentences and the restitution order of $ 452 million for Holmes and his second in command, Ramesh “Sunny” Balwani, who was sentenced to almost 13 years in prison.
The former CEO of Theranos, Elizabeth Holmes, leaves the federal court in San José, California, on March 17, 2023.
Jeff Chiu/AP
The two had argued that the court made several legal errors and violated their constitutional rights during their separate judgments. The three judges panel for the Court of Appeals rejected their claims, finding that any error was harmless or that their arguments showed no violation.
As part of their appeal, they also questioned the restitution, arguing that the figure should not have been based on the total investments of investors. The panel maintained the restitution granted by the lower court, concluding the “real losses of the victims were equal to the total amount of their investments.”
ABC News has communicated with its lawyers to comment on the decision of the Court of Appeals.
Holmes, 41, was convicted of four charges of fraud and conspiracy of investors in January 2022 and sentenced to 135 months, or 11 1/4 years, in prison. She without success fought to delay her imprisonment.
The verdict followed a four -month trial that detailed the Holmes trajectory of an abandonment from Stanford University in 2003 to a star business leader on the cover of Fortune magazine a little more than a decade later.
Its fall began in 2015 in the midst of investigations of journalists and regulators on the defective product of the medical company, which claimed to provide precise information of the tests using only a few drops of blood.
Balwani, 59, former romantic partner of Holmes and president of the now missing blood test company, was sentenced for fraud and conspiracy in July 2022 and sentenced to 155 months in prison.
Sunny Balwani, former president of Theranos Inc., arrives at the Federal Court in San José, California, on July 5, 2022.
David Paul Morris/Bloomberg through Getty Images
The District Court determined that there were at least 10 victims in the case, a factor that improved the sentence of Holmes and Balwani. The two questioned this aspect of their sentence in their appeal, arguing that there were no evidence in the trial for five of the 10 victims of investors. The Court of Appeals determined that there was no base in this claim while affirming its sentences.
Holmes and Balwani were also ordered to pay $ 452 million in restitution to those who suffered damage to the company’s fraud, including $ 125 million of that sum to the titan of the media 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 Walmart founders. Walgreens and Safeway, who had reached billionaire agreements with Holmes to use Theranos technology, were also included in a set of entities designated as victims that deserve restitution.
Holmes and Balwani argued that restitution should have been based on the decrease in the value of the shares after fraud came to light, and no, as ordered, the money that each victim invested.
The Court of Appeals affirmed the original restitution, finding that the victims “could never recover any amount of residual value that the shares could have retained” and that their “inability to resell their actions would justify granting them the total value of their investment.”
Max Zahn of ABC News contributed to this report.
