Elizabeth Holmes Ordered To Pay $452 Million in Restitution, Including $125 Million To Rupert Murdoch
Theranos founder Elizabeth Holmes and her ex-boyfriend and former business partner Sunny Balwani have been ordered to pay $452 million in restitution, Business Insider reported.
Holmes, who was sentenced to over 11 years in prison after a jury last year found her guilty of defrauding investors, has also been ordered to report to prison on May 30. Balwani started his 13-year sentence in April.
The restitution includes $125 million to Rupert Murdoch, one of the biggest investors in her ambitious company, and the RDV Corporation, which manages assets for the DeVos family, will get about $100 million.
Others who will also get their investments back include former Wells Fargo CEO Richard Kovacevich, who will get $4.1 million, and Lucas Venture Group, which will receive about $7.5 million. Walgreens and Safeway will receive $40 million and $14.5 million, respectively.
Holmes told New York Times she couldn't afford to pay her $30 million legal defense bill so she has no idea how she will collect the 9-figure amount that she now owes.
Theranos fraud trial began in 2021 and prosecutors accused Holmes of intentionally misleading investors and patients. Holmes was charged with keeping secrets from the employees and the investors and lying about the company's profits.
In the first week, the prosecution presented a series of documents and high-profile witnesses, focusing on the faulty test results that the device "Edison" produced. The prosecution also produced evidence of Balwani and Holmes brushing everything under the carpet deliberately. At the end of the trial, both Holmes and Balwani were found guilty and given prison time.
According to Daily Mail, Judge Edward Davila ordered them to pay the investors.
Theranos: Rise and Fall
During her first year at Stanford in 2003, Elizabeth conceived the idea of creating a patch that would test tiny blood samples for a host of diseases. She registered and filed for paperwork to get a patent. After a while, the idea of Theranos came along. This suggested that the patients will no longer have to give complete tubes of blood samples. Instead, they could just make do with only a few drops of blood to look for signs of any disease.
Theranos promised to make the process of blood testing simpler, faster and cost-efficient. After dropping out of Stanford, Homes convinced one of her Stanford professors, Channing Robertson, to join her venture and become a board member. Roberton helped Holmes get in touch with many venture capitalists and she ended up raising close to $6 million in capital in less than a year.
Back in the day, Holmes worshipped Apple co-founder Steve Jobs and started wearing black turtlenecks just like Jobs. She quickly gathered a lot of attention and went public with that image in 2013. Two years later, Holmes promised that Theranos blood tests will be available within 5 miles of every American neighborhood. She became a business tycoon and celebrated visionary appearing on every cover of business magazines, like Forbes, Fortune and even landed on Time Magazine's list of 100 most influential people, as per Integrity Line.
There were a couple of people who hopped on board thinking they might be part of creating something revolutionary only to realize what a big hoax everything was. Tyler Shultz started working in the company in 2013 and soon started encountering many internal problems with the test results. He saw that despite the results being filled with errors the reports that were being documented came perfect as they were being altered. He also noticed that none of the inspectors were permitted to enter the labs where the famous testing machine called "Edison" was installed.
The shocking revelation followed by reports that the tests were being conducted through third-party equipment.
Another Lab assistant Erika Cheung joined and noticed faulty results right away, she soon took her own blood tests to Balwani and showed how conventional test results objected to the results gotten by Edison. Balwani was quick to brush the matter aside and questioned Cheung's competence.
In 2015, Cheung wrote a letter to the Centers for Medicare and Medicaid Services exposing the farud at the Theranos lab.