The once-vaunted CEO’s reputation began to disintegrate more than six years ago when a media investigation revealed that Theranos — which purported to be able to run a multitude of tests from just a couple drops of blood — was using traditional lab machines from other companies to complete many of its tests. Former employees said the technology was inconsistent and not working nearly as well as Theranos advertised to doctors and investors.
Holmes went from being regarded as a young leader in Silicon Valley to the disgraced subject of a best-selling book, multiple podcasts, an HBO documentary and a Hulu TV series.
Holmes, who started Theranos while she was still a student at Stanford, is appealing her fraud convictions, a process that could stretch for several months or years. She petitioned a judge to allow her to remain free while the appeal winds its way through the court system, but Davila, who heard her original case and sentenced her, denied the motion. In April, Holmes appealed Davila’s decision in a last-ditch attempt to stay out of prison, but Tuesday’s decision by the appeals court meant Holmes only delayed her reporting date by roughly a month.
Holmes’s former business partner, Sunny Balwani, was convicted in a separate but similar trial of 12 counts of conspiracy to commit wire fraud and wire fraud. He was sentenced to nearly 13 years in prison and started his incarceration on April 20 at a federal correctional institute in San Pedro, Calif.
After Theranos eventually shuttered in 2018, amid multiple regulatory and media investigations, Holmes kept a low profile until her months-long trial attracted widespread media and public attention in late 2021. The former CEO was convicted of misleading investors about the capabilities of the company. Theranos raised about $900 million from investors, including prominent technology leaders and U.S. political figures.
Its investors included Oracle co-founder Larry Ellison, media executives Rupert Murdoch and the Cox family, and the family of former education secretary Betsy DeVos. Holmes also attracted prominent statesmen such as Henry Kissinger and Jim Mattis to her board of directors.
Mattis later testified at her trial, saying he would have had a different view of the company if he had known some limitations of the Theranos blood-testing device.
“It would have tempered my enthusiasm significantly,” he said in response to a prosecutor’s questions about the use of third-party devices.
Her story has become emblematic in some circles of apparent greed and a “growth at all costs” mind-set inside Silicon Valley. But members of the tech community have sought to distance themselves from Holmes and Theranos, which they often regard as an outlier.
Holmes has two young children, including one who was born before her trial and another born after her sentencing. Davila has previously recommended she serve her time at a federal prison camp in Bryan, Tex., about 100 miles outside of Houston.
In an April court document for her appeal, Holmes’s lawyers argue that her 135-month sentence is “excessive” and the result of errors in calculation during the federal sentencing.
“This Court should reverse the conviction or at a minimum remand for resentencing,” the document states.