Theranos founder appeals against prison sentence

Category: Americas Fintech Med Tech
Posted by Lea Hogg

thehElizabeth Holmes has filed an appeal against her conviction in the Theranos blood testing scandal, just days before she was due to begin her 11-year prison sentence. Holmes is adamant that the charges and her prison sentence for the blood testing scam is ‘unjust’.

In November last year, 39-year-old Holmes was convicted on four charges of fraud and sentenced over the scandal.

She avoided the prison sentence earlier this month when she appealed the judgement. Her prison term was expected to start on 27 April.

The appeal that her lawyers filed against her conviction claims that the prosecution “parroted the public narrative”. Holmes claims that the capabilities of the Theranos technology that was marketed to investors was intentionally misrepresented by the prosecution.

Holmes sold the concept of Theranos with the promise of providing new blood testing technology capable of screening for dozens of ailments simultaneously and managed to raise around US $1 billion from a large number of high profile investors. Consequently, at the peak of its popularity Theranos was valued at around US $9 billion.

Investors were incredibly impressed by Holmes and as a result the company reached new heights. By 2014 Holmes was named as America’s youngest self-made female billionaire. It did not last for long however as the concept of the technology used by Theranos was discovered to be fraudulent.  As a result the company collapsed.

Her lawyers claim there were breaches during prosecution

Attorneys for Holmes claim that a number of breaches took place during her prosecution. They allege that the judge “indulged” by “abus[ing]” his discretion. The lawyers also claim that significant testimony was withheld during the trial of Sunny Balwani, Holmes’ co-defendant. The evidence would have implicated Balwani in the company’s financial management. The jury’s guilty verdict is considered to be totally ‘unjust’ according to Holmes and her team of lawyers.

If Holmes is unable to obtain a new trial, she will seek a reduction in her sentence, which her lawyers describe as too “severe and erroneously decided.”

Company promoted as a pioneer of technology

According to the former founder of Theranos, blood tests could  performed very quickly as a result of using a small amount of blood. She claimed that the results were very accurate. In 2015 Professor John Ioannidis and Eleftherios Diamandis, professor of biochemistry, started to question the technology behind Theranos. By the year 2016, as a result of a number of law suit clams from medical service providers, Elizabeth Holmes’ personal net worth was reported to have dropped from US $4.5 billion to nothing. The company was dissolved in September 2018. 

In the meantime, the company’s former president Sunny Balawani is serving his prison sentence after he was charged on all 12 counts of fraud and conspiracy brought against him. Balwani has been sentenced to nearly 13 months in prison.

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