Lawyers for disgraced entrepreneur Elizabeth Holmes said this week that she will be unable to pay victims of her failed blood-testing start-up Theranos $250 a month after she is released from prison.
Ms Holmes, 39, began an 11-year, three-month prison sentence in Texas in May after she pleaded guilty last year to four counts of wire fraud and telling investors about her company’s technology and business deals. A conspiracy was hatched to mislead and cheat.
Last month, a federal judge in California ordered Ms Holmes and her former business partner, Ramesh Balwani, to pay $452 million in restitution to investors who were defrauded, including media mogul Rupert Murdoch .
Federal prosecutors last week asked the US District Court for the Northern District of California to correct “clerical errors” in court records. One of the suggested improvements would require Ms. Holmes to pay, as part of her restitution, either $250 or at least 10 percent of her earnings, whichever is greater, each month after she is released from prison .
Ms Holmes’s lawyers objected to the proposed change in the filing on Monday, saying the court had sufficient evidence to show she had “limited financial resources”.
His lawyers also disputed the government’s argument that the change would align with the payment schedule for Mr. Balwani, who was tried separately and is serving a nearly 13-year sentence on fraud charges. He must pay at least $1,000 per month after his release from prison, according to court records.
Ms Holmes and Mr Balwani have appealed their cases.
Ms Holmes’s lawyers argued that it was appropriate that the two were treated differently in sentencing. “There is no indication in the record that the absence of schedule changes after they were issued was a clerical error,” the filing said.
Lawyers representing Ms Holmes did not immediately respond to a request for comment on Thursday. A spokeswoman for the Justice Department declined to comment.
Other entities listed as victims for restitution purposes include RDV Corporation, an investment firm representing the wealthy DeVos family of Michigan, which invested $100 million in Theranos, and several companies associated with Silicon Valley venture capitalist Don Lucas. Investment vehicles included. passed away in 2019,
Ms. Holmes raised $945 million for Theranos, a company she founded in 2003 after dropping out of Stanford University. He promised that the company would revolutionize health care with a test that could detect a wide variety of diseases with just a few drops of blood. But a 2015 investigation by The Wall Street Journal exposed claims that its blood-testing technology didn’t work. Theranos dissolved in 2018.
