Theranos cofounder Elizabeth Holmes request to toss out fraud verdict denied
SAN JOSE -- A federal judge on Thursday tentatively declined to overturn the jury conviction of disgraced Theranos CEO Elizabeth Holmes on four felony counts of fraud and conspiracy.
That leaves the former Silicon Valley star a step closer to serving prison time.
U.S. District Judge Edward Davila won't make that decision final until Oct. 17, when he is scheduled to sentence Holmes in the same San Jose courtroom where a jury found her guilty of duping investors in her much-hyped blood-testing startup.
Holmes, 38, faces up to 20 years in prison and a $250,000 fine, plus restitution, for lying to investors about a Theranos technology she hailed as a revolution in healthcare but which in practice produced dangerously inaccurate results.
Amy Saharia, one of Holmes' lawyers, tried to persuade Davila that the jury of eight men and four women had acted irrationally during their seven days of deliberations.
The judge concluded that the jurors drew reasonable inferences from evidence presented at the trial, although he said he would still review some cases Saharia presented before making a final decision.
Thursday's 90-minute hearing marked the first time Holmes has returned to the court since her Jan. 3 conviction. The verdict ended a nearly four-month trial that recounted Holmes' remarkable rise from a Stanford University dropout in 2003 to a lionized entrepreneur once worth $4.5 billion before it all unraveled in 2015.
Her ex-boyfriend and former second-in-command, Ramesh "Sunny" Balwani, was also found guilty of fraud by a separate jury. Balwani also faces 20 years in jail.
Their back-to-back trials spanned nearly a year and mark the final chapter of a startup that rose to prominence, and a $9 billion valuation, with a promise to revolutionize blood testing only to become a cautionary tale for tech founders and companies.
Judge Davila will consider a variety of factorsn in determining the sentence, including the amount of money intended to be defrauded. The wire fraud charges related to individual investors totaled more than $154 million, for example.
Between their convictions and their scheduled sentencing dates, the probation office conducts an investigation into each of the former executives to provide a holistic look at their history — from their family to their financials, as well as their crimes — which will assist the judge in determining a sentence.
That may also include factors such as their psychological histories, or any trauma, which is where Holmes' allegations about the nature of her relationship with Balwani, who is nearly 20 years her senior, may play a role. Holmes and Balwani will also each be permitted to submit sentencing memoranda that make their case to the court for leniency in sentencing.