SAN JOSE, Calif. (AP) – Embattled Theranos CEO Elizabeth Holmes made what could be her last court appearance Friday before she begins an 11-year prison sentence unless a judge grants her request to remain free while her lawyers are appealing her sentence to commit a blood test fraud.
The 90-minute hearing came four months after Holmes’ last court appearance. That’s when U.S. District Judge Edward Davila sentenced her to dupe investors in Theranos, a startup she founded 20 years ago and rode to fleeting fame and fortune on her promises of a revolutionary blood-testing technology.
Before the hearing started, a man in the audience in the courtroom in San Jose, California, tried to approach the table where Holmes was sitting, carrying a document in his hand. He was quickly intercepted by security personnel, who forcibly removed him. Holmes did not seem fazed by the disturbance.
The case ended without a ruling on whether Holmes, 39, will be able to stay out of jail while her appeal unfolds or surrender to authorities on April 27, which is currently scheduled. Davila said he hopes to issue his decision in early April.
The judge rejected a similar bid earlier this month to avoid prison made by Holmes’ former lover and convicted Therano accomplice, Ramesh “Sunny” Balwani, who faces a nearly 13-year sentence after a jury found him guilty of 12 counts of fraud and conspiracy. Balwani, 57, was due to report to a federal prison in Southern California on Thursday, but his lawyer used a last-minute legal maneuver to gain more time.
Holmes came to his St. Patrick’s Day hearing wearing a black blazer and blue skirt. She recently gave birth to her second child, according to court documents that did not reveal gender or date of birth.
One of her lawyers, Amy Saharia, argued that Holmes should be allowed to remain free because of various missteps in the presentation and omission of evidence during her four-month trial, making it likely that an appeals court will overturn her conviction for four counts of fraud and conspiracy.
“We think the record is riddled with problems,” Saharia argued. She specifically cited Davila’s refusal to allow the jury to see a sworn statement Balwani gave during a Securities and Exchange Commission investigation into Theranos’ downfall, which Holmes’ defense team believes would have helped exonerate her.
Federal prosecutor Kelly Volkar countered that there is “no likelihood of overturning” Holmes’ conviction, arguing that the lawsuit documented seven different categories of fraud she engaged in while running Theranos. Most of the deception centered on a device called the “Edison,” which Holmes had boasted would be able to scan for hundreds of diseases and other health problems with just a few drops of blood taken with a finger prick.
But Edison produced such wildly unreliable results that Theranos began relying on third-party testing equipment already widely on the market — a switch that Holmes hid in an effort to keep the company afloat.
“It was shocking for the investors,” recalled Volkar Davila.
The two opposing sides also sparred over how much compensation Holmes should pay defrauded investors whose trust briefly boosted her wealth to $4.5 billion based on Theranos’ peak value before its collapse.
Federal prosecutor Robert Leach argued that her conspiracy conviction warranted nearly $900 million in restitution to repay Theranos investors who were swept up in her lies. “Just to apply common sense, the money these investors lost is the money they put in,” Leach said.
But Hollmes’ lawyer Patrick Looby countered that prosecutors were far-fetched in seeking an “all or nothing” restitution amount. He noted that the jury in her trial could not reach a verdict on three counts of investor fraud, prompting prosecutors to dismiss those charges. At most, Looby argued, Holmes’ restitution sentence should be limited to the handful of investors who testified at her trial.