Late on Monday, Judge Edward Davila of the Federal Court, Northern District of California, ruled that Elizabeth Holmes would not be able to remain free on bail while appealing her trial and sentence. In his 11-page ruling, he dismissed the defense claims that evidence around Theranos’ technology was not presented to the jury and affirmed that the key charges were related to financial fraud, the company’s financial status, and the false claim that the technology was validated by pharmaceutical companies. “Whether the jury heard more or less evidence that tended to show the accuracy and reliability of Theranos technology does not diminish the evidence the jury heard of other misrepresentations Ms. Holmes had made to investors.” He also noted that her defense had not introduced anything to make a reversal of the decision or a new trial likely, such as new evidence.
It’s anticipated that Holmes’ defense will quickly file an appeal of Judge Davila’s decision to the 9th Circuit Court of Appeals. However, this is the same court that denied Sunny Balwani’s same appeal last Friday. Holmes’ surrender to Federal prison is scheduled for 2pm on 27 April, a little over two weeks from now. She will be serving her 11+ year sentence at the Federal prison in Bryan, Texas unless the Bureau of Prisons changes this recommendation to another Federal prison.
Her defense has filed multiple appeals of Judge Davila’s rulings and the jury’s guilty verdict on four counts of fraud of 11 on various grounds, including errors made during the trial [TTA 15 Dec 22], with the goal of securing a new trial. Those appeals are with the 9th Circuit and could go on for years. What it now looks like is that Holmes will be serving her time in Texas while these appeals go through, not free or under house arrest. Serving time will not be easy for her in a cell with three other women and duties such as stuffing bag lunches. Mercury News (paywalled), CBS Bay Area, The Hill, TechCrunch
Sunny Balwani had a long Good Friday, receiving the bad news late Thursday that the 9th Circuit Court of Appeals denied his bid to remain free while on appeal. The court denied the appeal on the basis that Balwani had not raised any substantial questions of law or new evidence resulting in a reversal on some of the charges that would shorten his sentence. He was found guilty on all 12 counts and was sentenced to 12 years and nine months. Balwani’s lawyers now have requested from Judge Davila a new surrender date of 20 April, stating that their client needs time to get his “affairs in order”. His original surrender date was 16 March, delayed by the appeal. Where Balwani will serve his sentence is still up in the air. Judge Davila had recommended the Federal facility at Lompoc in Santa Barbara County, but the Bureau of Prisons recommended the Atlanta penitentiary which has been dogged by years of scandals, security lapses, and prisoner abuse allegations. His defense is appealing this assignment. As of now, Balwani will surrender to Terminal Island near San Pedro in Southern California in a little over a week. Mercury News (paywalled), CBS News Bay Area
Some reports have indicated that Judge Davila has finished with all his rulings, but what is still not finalized is the restitution both Holmes and Balwani must make to investors. Those rulings are scheduled for this month. The amounts being debated are largely theoretical as neither Holmes nor Balwani has much in the way of assets left. TTA 22 March