Theranos founder Elizabeth Holmes has appealed her felony-fraud conviction — claiming up to 10 reasons she should be granted a new trial — and is asking the court to grant her freedom until her appeal is done.
Holmes, 38, was sentenced last month to more than 11 years in prison, after her January conviction on four counts of defrauding investors in her now-defunct Palo Alto blood-testing startup out of more than $144 million.
At her sentencing in U.S. District Court in San Jose, Judge Edward Davila gave Holmes, who is pregnant with her second child, until April 27 to remain free before she begins her sentence.
Now, she is appealing the conviction and sentence to the U.S. Court of Appeals for the Ninth Circuit, seeking a new trial.
In a court filing asking Davila to let her stay out of prison until her appeal is concluded — which legal experts say could be more than a year from now — Holmes noted that she was found guilty only on charges of defrauding investors, not on the charges of defrauding patients.
“This was a complex, hard-fought, multi-month trial with numerous witnesses and hundreds of exhibits that produced a split verdict,” the filing last week in U.S. District Court in San Jose said. “The record is teeming with issues for appeal.”
Holmes, a Stanford University dropout, founded Theranos at age 19. At its peak, the startup was valued at $9 billion, based on Holmes’ false claims that her technology could conduct a full range of tests using a few drops of blood. A series of Wall Street Journal exposés led to federal charges and the company’s 2018 demise.
Holmes’ filing cited purported errors by Davila as grounds for appeal, including his allowing the jury to hear about regulatory action against Theranos, and about the company’s voiding of all test results from its “Edison” machines. Holmes’ filing argues that those events took place after she made any “relevant” statements to investors. She also claimed Davila should have granted her September motion for a new trial based on a troubled key prosecution witness’s visit to her home months after her conviction.
Former Santa Clara County prosecutor Steven Clark believes Holmes made a strong argument for staying free during her appeal. Holmes, who is banned until 2028 from serving as an officer in a public company, is not a threat to public safety, and also is unlikely to flee, Clark said. “Anywhere she goes anywhere in the world, people know who she is,” he said. “There’s no place for Ms. Holmes to hide.” Davila, if he lets Holmes remain at liberty, could impose further restrictions on her, such as barring her from raising money. Prosecutors, however, are likely to argue that Holmes is just trying to delay her incarceration, and that she needs to start being held accountable for her crimes, Clark said.
Federal criminal appeals succeed at very low rates, according to the federal judiciary. And Davila has already ruled in detail on most of the issues Holmes has raised as potential grounds for appeal, Clark said. The appeals court is likely to recognize that Davila “bent over backwards to give everyone a fair shot in court,” Clark said. Still, he added, “you have to also recognize that she was only convicted of four of 12 counts which means that there were issues with the government’s case.”
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