Elizabeth Holmes Says She Can’t Afford $250 in Payments to Theranos Victims
Lawyers for disgraced entrepreneur Elizabeth Holmes said this week that after she was released from prison, she could not afford to pay $250 a month to victims of her failed blood-testing startup Theranos.
Ms Holmes, 39, began serving an 11-year and three-month sentence in Texas in May after being found guilty on four counts of wire fraud and conspiracy last year to defraud investors by misleading them about her company’s technology and operations had.
Last month, a federal judge in California ordered Ms Holmes and her former business partner Ramesh Balwani to pay swindled investors including media mogul Rupert Murdoch $452 million.
Federal prosecutors last week asked the US District Court for the Northern District of California to correct “clerical errors” in court filings. One of the proposed fixes would require Ms Holmes to pay either $250 or at least 10 percent of her earnings, whichever is greater, as part of her compensation each month after her release from prison.
Ms Holmes’ lawyers objected to that proposed change in a filing on Monday, saying the court had substantial evidence she was of “limited financial resources”.
Her lawyers also disputed the government’s argument that the change was consistent with the payment schedule for Mr Balwani, who is subject to separate proceedings and is serving nearly 13 years in prison for fraud. According to court records, he will have to pay at least $1,000 a month after his release from prison.
Ms Holmes and Mr Balwani have appealed their cases.
Ms Holmes’ lawyers argued that it was appropriate that the two had been treated differently at sentencing. “There is no evidence in the files that the lack of a change in schedule after her release was a clerical error,” the filing said.
The lawyers representing Ms Holmes did not immediately respond to a request for comment on Thursday. A spokesman for the Justice Department declined to comment.
Other companies listed as victims for restitution purposes include RDV Corporation, an investment firm representing Michigan’s wealthy DeVos family that invested $100 million in Theranos, and several investment vehicles related to Don Lucas, a Silicon Valley venture capitalist who died in 2019.
Ms. Holmes raised $945 million for Theranos, a company she founded in 2003 after dropping out of Stanford University. She promised the company would revolutionize healthcare with tests that could detect a variety of diseases with just a few drops of blood. However, the claims were exposed after a 2015 Wall Street Journal investigation found that the company’s blood-testing technology wasn’t working. Theranos was dissolved in 2018.
