Rupert Murdoch will receive $125 million, representing his entire stake in Theranos, while Walgreens will receive $40 million.
Elizabeth Holmes and Sunny Balwani, her ex and former business partner, have been ordered to pay $452 million in restitution.
Elizabeth Holmes, a convicted fraudster, had a difficult Tuesday.
She and her ex-boyfriend, Ramesh “Sunny” Balwani, were forced to pay $452 million in compensation to Theranos’s famed and now-defunct investors by the court in her fraud case, US District Judge Edward Davila. Both Holmes, the founder and former CEO of the business, and Balwani, the former president, are jointly liable for recouping the full sizeable money.
Fraudster Elizabeth Holmes had a challenging day on Tuesday.
The court in her fraud case, US District Judge Edward Davila, ordered Elizabeth and her ex-boyfriend, Ramesh “Sunny” Balwani, to pay $452 million in restitution to Theranos’s renowned and now-defunct investors. Holmes, the company’s founder and former CEO, and Balwani, its former president, are each jointly responsible for recovering the entire hefty sum.
Elizabeth Holmes, a fraudster, had a difficult day on Tuesday.
Elizabeth and her ex-boyfriend Ramesh “Sunny” Balwani were ordered by US District Judge Edward Davila in her fraud prosecution to pay $452 million in restitution to Theranos’s famed and long-gone investors. The former president of the firm, Balwani, and the company’s founder and former CEO, Holmes, are each jointly in charge of retrieving the full hefty money.
Although her most recent attempt secured her a few additional weeks of freedom, the appeals court predictably refused to grant her bail. In a one-page judgement on Tuesday, the justices came to the conclusion that Holmes’ appeal neither raised a “substantial question” of law or fact in her case nor would it, if the court agreed with her, reverse her conviction or call for a new trial. It was up Judge Davila to determine a new date for Holmes to go to prison, and the appeal of her conviction will go through as planned.
In documents filed on Wednesday, Holmes asked for a May 30 start date so she would have time to organise her affairs, including finding daycare for her two small children. Davila concurred.
The almost 13-year jail sentence for Balwani, who was found guilty on all 12 charges of cheating Theranos investors and patients, started last month. Balwani sought to stay out on bail during the appeal process while still challenging his conviction.
Rise and fall
In documents filed on Wednesday, Holmes asked for a May 30 start date so she would have time to organise her affairs, including finding daycare for her two small children. Davila concurred.
The almost 13-year jail sentence for Balwani, who was found guilty on all 12 charges of cheating Theranos investors and patients, started last month. Balwani sought to stay out on bail during the appeal process while still challenging his conviction.
However, in 2018, federal prosecutors accused the pair of plotting to con investors into supporting their startup technology, which was never successful. According to Davila’s summary of the government’s allegations, between 2010 and 2015, the two allegedly made “false statements regarding the capabilities of Theranos’s proprietary analyzer, its financial revenue streams, and device demonstrations, as well as misrepresenting Theranos’s relationships and interactions with Walgreens, the US Department of Defence, the Food and Drug Administration, pharmaceutical companies, and research institutions.”
Federal prosecutors assert that once the business was operating, the two then switched to scamming physicians and patients between 2013 and 2016. This reportedly entailed “delivering marketing materials to doctors and patients regarding Theranos’s blood tests, posting misrepresentations on Theranos’s websites, and transmitting blood test results with inaccuracies and modifications.”
Holmes was found guilty on four counts of scamming investors in January 2022, while Balwani was found guilty of defrauding investors, physicians, and patients last July.
Davila determined that Balwani and Holmes owe $452 million in reparations in his ruling from Tuesday. As part of it, $397,547,268 will be returned to individual investors, including Rupert Murdoch, who made the highest investment of $124,999,997. at addition, Safeway and Walgreens, who teamed up with Theranos to conduct blood testing at the drugstore giant’s neighbourhood shops, would get $14.5 million and $40 million respectively in compensation. Davila pointed out that despite the fact that Pfizer never approved the Theranos technology, was sceptical about it, and withdrew its investment in the firm, Holmes provided the pharmacy chain doctored validation documents using the Pfizer logo when Walgreens requested due diligence materials concerning the technique.
It’s unclear how Holmes and Balwani will divide the cost. Holmes only has modest assets, which are dwarfed by a $450,000 debt to pay a settlement with the Securities and Exchange Commission, according to court documents. Additionally, she has racked up almost $30 million in legal costs.
