The judge in Elizabeth Holmes’ federal trial over defrauding investors in blood testing startup Theranos was expected to issue decisions last week both on Holmes’ request to delay her upcoming prison sentence while an appeal is pending and on the amount she’ll be required to pay back the swindled investors.
But during a hearing that lasted just under 90 minutes on Friday, according to court documents, Judge Edward Davila merely heard arguments from federal prosecutors and Holmes’ defense team on each matter, without offering a definitive ruling on either.
Davila concluded by saying he’s aiming to issue those decisions early next month—just a few weeks before Holmes is slated to surrender herself on April 27 to begin an 11-year sentence in federal prison—the Associated Press reports.
After a four-month trial ended in Holmes’ being convicted on four of 11 counts of fraud at the start of 2022, she was sentenced in November to 11.25 years in prison plus three years of supervised release.
The ex-CEO and founder of Theranos is appealing the conviction, and her lawyers have requested that she be allowed to stay out of prison until the appeal process is complete.
In a late February court filing, they presented a series of arguments justifying Holmes’ bid to stay free, including the facts that the court has possession of her passport, that the collateral against her bail bond is “her parents’ only home” and that she now has two children to care for. (Holmes was visibly pregnant with her second child at the sentencing hearing in the fall.)
Additionally, her legal team reiterated their belief that the appeal will be successful, citing “many” issues with the original trial. They reasoned that if that happens, the case will be retried in court, and a ruling in Holmes’ favor—which they’re confident they could achieve—would release her from prison anyway.
Meanwhile, federal prosecutors have claimed in a court filing of their own that Holmes is indeed a “flight risk,” pointing to their discovery shortly after her conviction in January 2022 that Holmes and her partner, Billy Evans, had booked one-way tickets to Mexico—though Holmes didn’t take the trip after the prosecutors’ discovery, and her team said in the February filing that Evans had booked the tickets “before the verdict and full of hope.”
The prosecutors also argued in their January filing that the appeal request will be fruitless, claiming that the jury reached their verdict correctly. They also noted that the majority of the issues pinpointed by the defense team in the request are related to counts of defrauding Theranos patients, even though Holmes’ four convicted counts were related only to defrauding investors.
On the question of how much money Holmes should be forced to repay investors in Theranos, which raised nearly $950 million to reach a valuation of $10 billion at its peak, prosecutors have suggested that her restitution payments total nearly $900 million, while Holmes’ defense team filed a brief earlier this month concluding that “the Court should decline to order restitution.” For his part, Davila made his sentencing decision last year based on a calculation of $384 million in losses from just 10 Theranos investors—including Rupert Murdoch and Betsy DeVos—as well as a “reasonable total loss to investors” of $121 million.
Also in the process of appealing the court’s decision in his own case is Ramesh “Sunny” Balwani, Holmes’ ex-boyfriend and the former chief operating officer and president of Theranos. Balwani was found guilty last summer of all 12 fraud charges on which he was tried, and he was sentenced in December to just under 13 years in prison plus three years of probation.
In a ruling from Davila earlier this month, Balwani lost his own bid to delay his prison sentence amid the appeal and was scheduled to report to prison March 16, according to the AP. But mere hours before his deadline to surrender, Balwani’s legal team filed a last-minute appeal of that ruling, triggering a clause that allows him to remain free on bail until that appeal is complete.