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Judge proposes Elizabeth Holmes be sent to Texas prison camp
U.S. District Judge Edward Davila proposed sending the ex-CEO of Theranos, Elizabeth Holmes, to a prison camp at Bryan, Texas, to serve her sentence for fraud.
At a court hearing on Friday morning, lawyers for convicted Theranos founder and CEO Elizabeth Holmes argued that her upcoming prison term should be delayed until a higher court has reviewed the case.
In early 2022, a jury convicted Holmes of four counts of wire fraud and conspiracy based on her false statements about the accuracy and reliability of Theranos's much-touted fingerstick blood-testing technology.
After the trial, Judge Edward Davila of the Northern District of California sentenced Holmes to over 11 years in federal prison. Davila ordered Holmes to surrender to federal custody on April 27, 2023.
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In a motion filed after the sentence was handed down, Holmes's lawyers asked that she be allowed to remain free until the Ninth Circuit Court of Appeals reviews her conviction.
Defense lawyer Amy Saharia argued on Friday that Holmes is not a flight risk, pointing out that Holmes has recently given birth to her second child and has "another incentive not to flee." Saharia also argued that the trial record is "teeming with issues" that will likely "catch the Ninth Circuit's attention."
Among other things, the defense will appeal Davila's admission of evidence that the Centers for Medicare and Medicaid Services issued sanctions after it investigated the Theranos lab, and that a new lab director ordered that every test run on patients on Theranos machines be voided, on the ground that these events post-dated the Theranos fraud.
Assistant U.S. Attorney Kelly Volkar argued that Holmes has the "means and the motive to flee" now that her surrender date is coming up.
Volkar also argued that even if the Ninth Circuit finds errors in the trial, the appellate court will not reverse the verdict because of the strong evidence of misrepresentations made by Holmes to investors, separate and apart from the challenged rulings.
Judge Davila took the bail question under submission, saying that he did not expect to rule until early April.
Davila recently denied a similar motion for bail pending appeal by Holmes's business partner and former lover, Ramesh "Sunny" Balwani.
The denial meant that Balwani was scheduled to report to prison authorities on March 16. However, Balwani filed a last-minute motion in the Ninth Circuit, asking the court to intervene and allow him to remain free while the appeal is pending. Under Ninth Circuit rules, the motion automatically stayed Balwani's surrender date until the bail issue is decided.
If Judge Davila denies Holmes's motion for bail pending appeal, she too will have the option to seek relief from the Ninth Circuit and receive at least a temporary stay of her April 27 reporting date.