Former Theranos CEO Elizabeth Holmes arrives at federal court in San Jose, Calif., Monday, Oct. 17, 2022. (AP Photo/Jeff Chiu)
Theranos founder Elizabeth Holmes, who was expected to surrender to prison in hours to begin serving her 11-year sentence following her criminal fraud conviction got a last-minute court reprieve that keeps her free for at least another month.
The stay from the Ninth Circuit Court of Appeals came as Holmes is seeking to appeal an earlier decision denying her release while she appeals her conviction. She was scheduled to report to prison on Thursday.
Holmes as the founder of Theranos claimed to have revolutionized blood testing through a patented so-called nanotainer that only required a pinprick. The invention never worked, but Holmes persuaded patients and investors that it did, netting her company a $9 billion valuation at its height.
In July 2018, a grand jury indicted Holmes and her former chief operating officer and ex-boyfriend Ramesh “Sunny” Balwani, charging that it was all a massive fraud.
The indictment alleged that advertisements and solicitations encouraged doctors and patients to use Theranos’ blood testing services, even though they “knew Theranos was not capable of consistently producing accurate and reliable results for certain blood tests,” federal prosecutors said.
Prosecutors alleged the tests were likely to contain “inaccurate and unreliable results.”
The indictment alleged that Holmes and Balwani defrauded doctors and patients by making false claims and omitting information about the limits of their technology.
Balwani and Holmes were tried separately.
Balwani was sentenced in December 2022 to 12 years, 11 months in a California federal prison, officials said.
Holmes was convicted in January 2022 of one count of conspiracy to commit fraud on investors and three counts of committing fraud on individual investors, authorities said.
She was sentenced in November to 11 years and three months in federal prison.
At the time, U.S. Attorney Stephanie Hinds said Holmes “fabricated and spread elaborate falsehoods” for nearly a decade “to draw in a legion of capital investors, both big and small, and her deceit caused the loss of hundreds of millions of dollars.
“Her sentence reflects the audacity of her massive fraud and the staggering damage she caused,” she said.
Law&Crime’s Adam Klasfeld contributed to this report.
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