SAN JOSE, Calif. (KRON) — Ex-Theranos CEO Elizabeth Holmes and her ex-boyfriend, Ramesh “Sunny” Balwani, were ordered by a judge this week to pay nearly half a billion dollars in restitution to their victims.
Holmes and Balwani were convicted of defrauding investors who poured millions of dollars into the Silicon Valley biotech startup company based on lies and hype. Prosecutors illuminated how the duo’s lies rose to the level of criminal fraud and conspiracy.
During their trials, Holmes and Balwani both claimed that they walked away with nothing after the company’s blood testing technology was exposed as flawed and Theranos imploded in 2016.
Holmes, 39, was once America’s youngest self-made billionaire and held stocks worth $4.5 billion. She recently told the New York Times that she doesn’t even have enough money to cover her legal expenses from the trial. “I have to work for the rest of my life to try to pay for it,” Holmes told the Times. Holmes’ bond was posted using the value of her parents’ house.
Balwani’s defense attorney said, “Sunny never made a dime.”
Despite the former CEO and COO’s claims, this week U.S. District Judge Edward Davila ordered them to pay Theranos victims a total of $452 million in restitution. Davila broke down the numbers for each victim:
- Media mogul Rupert Murdoch: $125 million
- RDV Corporation (DeVos Family): $100 million
- Peer Ventures Group: $93 million
- PFM Funds: $52 million
- Walgreens: $40 million
- Safeway: $14.5 million
- Lucas Venture Group: $7.5 million
Judge Davila wrote, “This matter comes before the court to determine the amount of mandatory restitution owed to victims by defendants Elizabeth A. Holmes and Ramesh Sunny Balwani as a result of their fraud and conspiracy convictions. Having considered the parties’ written submissions and oral arguments presented at defendants’ respective hearings, the court orders restitution in the amount of $452,047,268. Both defendants will be jointly and severally liable for this sum.”
In addition to restitution, punishment for the former Theranos executives also includes more than a decade of imprisonment. Balwani, 57, of Fremont, is already serving his 13-year prison sentence.
“We can confirm, Ramesh Balwani, is in the custody of the Bureau of Prisons (BOP) at the Federal Correctional Institution (FCI) Terminal Island in San Pedro, California,” Federal Bureau of Prisons spokesperson Donald Murphy told KRON4 last month.
Holmes will spend her first night behind bars on May 30 to begin serving an 11-year sentence. Judge Davila ordered her to report to Federal Prison Camp in Bryan, Texas by no later than 2 p.m. May 30.
Holmes told the Times that she is spending her final weeks of freedom with her baby, toddler, and partner Billy Evans at a beach house in Southern California. Holmes fell in love with Evans after she broke up with and fired Balwani.
After dropping out of Stanford University in 2003 to found Theranos at age 19, Holmes promised to revolutionize healthcare with a technology that could scan for hundreds of diseases using just a few drops of blood.
Despite being responsible for the biggest fraud in Silicon Valley’s history and bogus blood testing technology, Holmes told the Times that she is still working on health care-related inventions. She plans to continue working on her inventions even in prison.
Holmes told the Times, “I still dream about being able to contribute in that space. I still feel the same calling to it as I always did, and I still think the need is there.”
Her lawyers said she is still working out child care for her 1-year-old son, William, and 3-month-old daughter, Invicta, before May 30’s deadline.