Michael Barbella, Managing Editor06.06.23
Elizabeth Holmes is running on empty.
She’s run out of excuses. She’s run out of delay tactics. She’s run out of options. And now, she’s run out of time.
Having exhausted all the tricks up her sleeve, Holmes reported to Federal Prison Camp in Bryan, Texas, on May 30 to begin serving her 11.25-year prison sentence for defrauding investors. She tried her best to delay the inevitable, to no avail—a federal judge denied her bid to remain free on bail while she appeals her fraud conviction.
“...the Court does not find that she has raised a ‘substantial question of law or fact’ that is ‘likely to result in reversal or an order for a new trial of all counts,’” ruled Judge Edward Davila (Northern District of California), who presided over Holmes’ 15-week fraud trial in 2021.
Davila’s decision extinguished any hope Holmes may have had to further delay her punishment for swindling $700 million from Theranos investors. As CEO, Holmes raised $945 million from magnates like Rupert Murdoch, Larry Ellison, and Tim Draper by claiming her company’s “revolutionary” blood testing technology would yield a significant return on investment. It probably would have, too, had it worked as advertised but a 2015 Wall Street Journal exposé proved the “proprietary” tech was a scam.
The newspaper learned Theranos had only ever performed about a dozen of the hundreds of tests it offered, and with questionable accuracy. Moreover, the company used third-party manufactured devices from traditional blood testing firms to conduct the tests rather than its own technology, according to the Journal.
“Our platform can yield—I’m thinking of the best way to say this,” Holmes told Fortune writer Roger Parloff, in a recorded interview replayed at her trial, “we can do all those tests, so we can provide data back to clinicians for all the same tests.”
She was referring to the 600 different tests that Quest Diagnostics can conduct with blood samples. Parloff had asked if Theranos had the same testing capacity.
It didn’t.
Holmes also told Parloff that her company’s testing devices had been used in Afghanistan, yet former board member Gen. James Mattis testified the machines were never used overseas.
Such discrepancies could easily be forgiven had they been isolated incidents, but trial testimony proved they were among the profusion of lies Holmes told to build her startup empire.
“She repeatedly chose lies, hype, and the prospect of billions of dollars over patient safety and fair dealing with investors,” Assistant U.S. Attorney Robert S. Leach wrote in a brief filed before Holmes’s sentencing last fall. “Elizabeth Holmes’ crimes were not failing, they were lying—lying in the most serious context, where everyone needed her to tell the truth.”
Clearly, truth-telling was not in Holmes’ blood during her Theranos days (just as well—it probably would have gone undetected by the firm’s faulty tech). But it seemed to become more prevalent in recent months as the mother of two attempts to overhaul her public image.
A recent 5,500-word profile in The New York Times portrayed Holmes as an authentic, sympathetic, “normal” woman who volunteers at a rape crisis hotline, abhors R-rated movies, and prefers bucket hats and mom jeans over black turtlenecks and Kabuki red lipstick.
That persona is a far cry from the media-spawned narcisisstic swindler the public has come to know over the past half-dozen or so years. That person, the Steve Jobs-obsessed chief executive, was merely a character she created, Holmes admits now.
“So why did she create that public persona?” Times reporter Amy Chozick asks in her May 7 article. “‘I believed it would be how I would be good at business and taken seriously and not taken as a little girl or a girl who didn’t have good technical ideas,’ said Holmes. ‘Maybe people picked up on that not being authentic, since it wasn’t.”’
Maybe? More likely definitely.
Holmes’ authenticity remains murky, though, even as she spent her last days of freedom with her husband, Billy Evans, and two children, William and Invicta (the latter is Latin for “invincible”). She still blames her ex-boyfriend and former Theranos COO Ramesh “Sunny” Balwani for the black turtleneck, red lipstick persona. “He always told me I needed to ‘kill Elizabeth,’ so I could become a good entrepreneur,” she told Chozick.
Convicted of 12 fraud and conspiracy counts, Balwani reported to a low-security federal prison in Los Angeles in mid-April to begin serving his nearly 13-year sentence. Both he and Holmes have been ordered to pay roughly $452 million in restitution to their crime victims. Holmes isn’t sure how she will (or even can) repay it.
Chozick admits she was swept up by Holmes’s authenticity, gentleness, and charisma. Yet she was reminded of her subject’s former persona while contacting supporters. “One of these friends said Holmes had genuine intentions at Theranos and didn’t deserve a lengthy prison sentence,” Chozick writes. “Then, this person requested anonymity to caution me not to believe everything Holmes says. This warning stuck with me...How do you have an honest conversation with a person whose fraud trial has played out so publicly? I tried to ask Holmes this directly. How do I believe you when you’ve been convicted of (basically) lying? But how could I ask someone who was nursing her 11-day-old baby on a white sofa two feet away if she was conning me?”
The better question is, how can you believe her answer?
She’s run out of excuses. She’s run out of delay tactics. She’s run out of options. And now, she’s run out of time.
Having exhausted all the tricks up her sleeve, Holmes reported to Federal Prison Camp in Bryan, Texas, on May 30 to begin serving her 11.25-year prison sentence for defrauding investors. She tried her best to delay the inevitable, to no avail—a federal judge denied her bid to remain free on bail while she appeals her fraud conviction.
“...the Court does not find that she has raised a ‘substantial question of law or fact’ that is ‘likely to result in reversal or an order for a new trial of all counts,’” ruled Judge Edward Davila (Northern District of California), who presided over Holmes’ 15-week fraud trial in 2021.
Davila’s decision extinguished any hope Holmes may have had to further delay her punishment for swindling $700 million from Theranos investors. As CEO, Holmes raised $945 million from magnates like Rupert Murdoch, Larry Ellison, and Tim Draper by claiming her company’s “revolutionary” blood testing technology would yield a significant return on investment. It probably would have, too, had it worked as advertised but a 2015 Wall Street Journal exposé proved the “proprietary” tech was a scam.
The newspaper learned Theranos had only ever performed about a dozen of the hundreds of tests it offered, and with questionable accuracy. Moreover, the company used third-party manufactured devices from traditional blood testing firms to conduct the tests rather than its own technology, according to the Journal.
“Our platform can yield—I’m thinking of the best way to say this,” Holmes told Fortune writer Roger Parloff, in a recorded interview replayed at her trial, “we can do all those tests, so we can provide data back to clinicians for all the same tests.”
She was referring to the 600 different tests that Quest Diagnostics can conduct with blood samples. Parloff had asked if Theranos had the same testing capacity.
It didn’t.
Holmes also told Parloff that her company’s testing devices had been used in Afghanistan, yet former board member Gen. James Mattis testified the machines were never used overseas.
Such discrepancies could easily be forgiven had they been isolated incidents, but trial testimony proved they were among the profusion of lies Holmes told to build her startup empire.
“She repeatedly chose lies, hype, and the prospect of billions of dollars over patient safety and fair dealing with investors,” Assistant U.S. Attorney Robert S. Leach wrote in a brief filed before Holmes’s sentencing last fall. “Elizabeth Holmes’ crimes were not failing, they were lying—lying in the most serious context, where everyone needed her to tell the truth.”
Clearly, truth-telling was not in Holmes’ blood during her Theranos days (just as well—it probably would have gone undetected by the firm’s faulty tech). But it seemed to become more prevalent in recent months as the mother of two attempts to overhaul her public image.
A recent 5,500-word profile in The New York Times portrayed Holmes as an authentic, sympathetic, “normal” woman who volunteers at a rape crisis hotline, abhors R-rated movies, and prefers bucket hats and mom jeans over black turtlenecks and Kabuki red lipstick.
That persona is a far cry from the media-spawned narcisisstic swindler the public has come to know over the past half-dozen or so years. That person, the Steve Jobs-obsessed chief executive, was merely a character she created, Holmes admits now.
“So why did she create that public persona?” Times reporter Amy Chozick asks in her May 7 article. “‘I believed it would be how I would be good at business and taken seriously and not taken as a little girl or a girl who didn’t have good technical ideas,’ said Holmes. ‘Maybe people picked up on that not being authentic, since it wasn’t.”’
Maybe? More likely definitely.
Holmes’ authenticity remains murky, though, even as she spent her last days of freedom with her husband, Billy Evans, and two children, William and Invicta (the latter is Latin for “invincible”). She still blames her ex-boyfriend and former Theranos COO Ramesh “Sunny” Balwani for the black turtleneck, red lipstick persona. “He always told me I needed to ‘kill Elizabeth,’ so I could become a good entrepreneur,” she told Chozick.
Convicted of 12 fraud and conspiracy counts, Balwani reported to a low-security federal prison in Los Angeles in mid-April to begin serving his nearly 13-year sentence. Both he and Holmes have been ordered to pay roughly $452 million in restitution to their crime victims. Holmes isn’t sure how she will (or even can) repay it.
Chozick admits she was swept up by Holmes’s authenticity, gentleness, and charisma. Yet she was reminded of her subject’s former persona while contacting supporters. “One of these friends said Holmes had genuine intentions at Theranos and didn’t deserve a lengthy prison sentence,” Chozick writes. “Then, this person requested anonymity to caution me not to believe everything Holmes says. This warning stuck with me...How do you have an honest conversation with a person whose fraud trial has played out so publicly? I tried to ask Holmes this directly. How do I believe you when you’ve been convicted of (basically) lying? But how could I ask someone who was nursing her 11-day-old baby on a white sofa two feet away if she was conning me?”
The better question is, how can you believe her answer?