Holmes and Balwani Fraud Convictions Upheld on Appeal

Theranos Founders' Appeal Rejected

The appeals of Elizabeth Holmes and Ramesh “Sunny” Balwani were rejected on Monday by the United States District Court for the Northern District of California. Their attempt to reverse their fraud convictions and lessen their prison terms was unsuccessful.

The court also upheld the $452 million joint restitution order against the pair. This means they remain financially responsible for compensating those they defrauded.

Convictions Upheld

Holmes, who established Theranos, and Balwani, the company’s former Chief Operating Officer, were found guilty in separate 2022 trials. The charges stemmed from misleading investors regarding the functionality of Theranos’ blood-testing technology.

Holmes received a sentence exceeding 11 years, while Balwani was sentenced to almost 13 years. Both individuals commenced their prison sentences in 2023.

Arguments on Appeal

The core of the appeal centered on claims of improper testimony. Holmes and Balwani contended that the district court permitted testimony from former Theranos staff members who, acting as lay witnesses, provided opinions that should have come from qualified expert witnesses.

The appeals court acknowledged that certain testimony did venture into expert territory. However, it determined that these errors did not significantly impact the verdict.

Challenges to Evidence

Holmes specifically challenged the inclusion of a government report detailing deficiencies within Theranos’ laboratory. She argued this report prejudiced the jury against her.

The court countered that the report was pertinent to demonstrating Holmes’ awareness and intent. Furthermore, Holmes asserted her rights were infringed upon when she was restricted from questioning a former Theranos lab director about his employment after leaving the company.

The appellate panel disagreed, stating the court acted appropriately in limiting the scope of the cross-examination.

Balwani's Claims Dismissed

Balwani also raised concerns about the expansion of charges during the trial, an argument the panel swiftly dismissed. He further claimed a violation of his right to a fair trial due to the government’s failure to correct allegedly false testimony from investors.

This argument was also rejected, with the court concluding that any potential issues would not have altered the trial’s outcome.

Current Imprisonment Locations

Currently, Balwani is incarcerated at Terminal Island, a minimum-security federal facility near Los Angeles. Holmes is serving her sentence at FPC Bryan, a minimum-security federal prison camp located roughly 100 miles from Houston.

The denial of this appeal likely brings the legal proceedings for both Theranos founders closer to a final conclusion.