Elizabeth Holmes, one-time billionairess, Silicon Valley darling and fraudster CEO of the now-defunct biotech startup Theranos, reported to prison this week to serve out a 135-month sentence.
For now, this marks the end of Holmes’s seemingly interminable battle to bamboozle, outfox, outsmart and sidestep the U.S. justice system, so she would not have to do any time.
This consisted of, among other things: repeatedly lying about her company’s capabilities to investors and the patients who used her blood-testing technology to check for disease, monitor pregnancies and keep tabs on a wide range of truly sensitive health issues; insisting she should not have to go to prison until she was done appealing her convictions; purchasing a one-way ticket to Mexico to whisk her out of the country after a jury found her guilty of multiple crimes; and making the unconscionably self-serving decision to marry and get pregnant twice ahead of going to prison, in what appeared to be a last-ditch effort to avoid her fate.
Throughout her trial, Holmes maintained her innocence and even tried to argue that claims she made about her company’s capabilities were not crimes, because they were almost true. “I wanted to convey the impact the company could make for people and for health care,” she said. “I talked about what we created and what it could do, what was possible.”
In a sign of how long the process to see her to prison has actually taken, Holmes’s company was shut down nearly five years ago and she was convicted more than a year back. She has been dancing around reporting to prison ever since. A San Jose, Calif., jury found her guilty in January 2022 on four federal charges of fraud, three counts of wire fraud and one count of conspiracy to commit wire fraud. Holmes gave birth to her first child just before her trial began in 2021 and her second child just before going to prison this week.
Holmes’s convictions arose from defrauding investors out of hundreds of millions of dollars by actively misleading them about her company’s blood-testing technology. More disturbingly, the frauds stemmed from Holmes aggressively promoting “revolutionary” fingerstick blood tests she knew provided inaccurate and unreliable results to patients, risking their health and their lives. (For the full Holmes story, please see Power Corridor’s Big Read here.)
For a time, Holmes was feted as the youngest self-made billionaire on the planet, as the valuation of her Palo Alto, Calif., company climbed to $9 billion. By September 2018, Theranos shut down, awash in scandal, as the U.S. Securities and Exchange Commission filed charges against Theranos and Holmes claiming an “elaborate, years-long fraud.” Before shuttering, Theranos even tried to sell itself to another company, but there were no buyers.
As Holmes entered the Bryan, Texas, low-security federal prison camp Tuesday, she could be seen wearing white sneakers and jeans and one of her signature casual beige sweaters. She was filmed from a distance, her long hair mostly covering her face, so one might be forgiven for wondering whether the blurry person in the video was really Holmes or perhaps just a stunt double, another one of Holmes’s clever escape-and-delay tricks.
Holmes’s arrival at the prison was hotly anticipated by both inmates and staff alike. One inmate told The Wall Street Journal, “Some people are like, ‘I want to be her friend.’ But other people are like, ‘I can’t believe that’s all she got for taking all that money.’”
Others said some of the guards took a particular interest in high-profile inmates, with one corrections officer excited to order Holmes to scour pans.
Apparently, a copy of the bestselling book about Holmes’s fraud and the collapse of Theranos, “Bad Blood,” can also be taken out at the prison library.
Journalists watching Holmes reporting to prison reacted too, mostly by marveling at the irony of seeing such a widely celebrated Silicon Valley wunderkind rise so fast and fall so hard.
“Elizabeth Holmes was named one of the most influential people in the world by Time in 2015,” wrote Rebecca Jarvis, chief business, technology and economics correspondent for ABC News. “Today, she’ll become one of the 655 inmates at this Bryan, Texas, minimum security prison, where most of her peers have been convicted for white collar crimes and low-level drug offenses.”
Notably, the reason Holmes was sent to the Texas facility was because Judge Davila, who presided over her federal trial, thought sending her there would make family visitation easier.
As it turns out, Holmes grew up in Houston, where her father was an executive at that other paragon of corporate financial integrity: Enron.