How Elizabeth Holmes was imprisoned

Theranos was worth $10 billion ten years ago. Wire fraud indicted her five years ago. Holmes began her 11-year-and-3-month sentence today.

A defendant is usually convicted and imprisoned soon after indictment. Holmes’ legal team has played every card to delay her fall, which was once hailed as the next Steve Jobs.

Theranos’ tale is well-known: In 2015, Wall Street Journal reporter John Carreyrou revealed that Theranos’ blood testing technology didn’t work, bringing down a young Stanford dropout’s healthcare revolution. Unsuspecting patients were getting blood tests on Theranos machines, risking false positives for cancer, HIV, and miscarriage.

Since then, the now-infamous blood testing startup has unraveled slowly and messily. With Holmes and co-conspirator Sunny Balwani in prison, hopefully this is the last Theranos coverage for a while. Read it if you want to catch up on Theranos’s dangerous medical practices.

2016–2017 lawsuits, layoffs

After investors realized Theranos was a sham, litigation escalated. Theranos continued to make headlines after the U.S. government began its investigation in 2016, but they were less positive.

• Ex-Theranos customer files a lawsuit claiming faulty blood tests contributed to his heart attack (July 2016)
• Theranos closes its labs and wellness centers, lays off 340 (October 2016)
• A hedge fund is now suing Theranos, citing “lies, material misstatements, and omissions” (October 2016)
• Walgreens is now suing Theranos for $140 million in Delaware (November 2016)
• A prominent Silicon Valley investment banker is suing Theranos, and seeking class-action status (November 2016)
• Theranos slashes another 41 percent of its workforce (January 2017)
• Arizona plans to sue Theranos over faulty blood tests (January 2017)
• Theranos closed its last remaining blood-testing lab after it reportedly failed an inspection (January 2017)
• Theranos is offering investors Elizabeth Holmes’ shares if they promise not to sue (March 2017)
• Theranos gets $100 million in debt financing to carry it through 2018, with some caveats (December 2017)

Theranos collapse (2018)
Theranos barely survived those two years of headlines. The company folded, and Holmes and Balwani were charged with fraud by the U.S.

• Theranos founder Elizabeth Holmes charged with massive, ‘years-long fraud’ (March 2018)
• Theranos reportedly lays off most of its remaining employees as it tries to avoid bankruptcy (April 2018)
• Elizabeth Holmes reportedly steps down at Theranos after criminal indictment (June 2018)
• WSJ reports that Theranos will finally dissolve (September 2018)

Theranos’ fall fascinated Hollywood and tech. A Theranos documentary screened at Sundance, ABC ordered a documentary and podcast, and Hulu ordered “The Dropout” mini-series. After seeing “The Dropout,” Jennifer Lawrence left Apple’s Theranos movie.

2021–2023 Elizabeth Holmes and Sunny Balwani trial
The coronavirus pandemic delayed Holmes and Balwani’s fraud trial in June 2020. Holmes became pregnant, delaying the trial. Holmes’ legal team successfully moved for separate trials, alleging Balwani had abused Holmes while they were secretly dating. Holmes later testified about how this abuse affected her as Theranos CEO, but the jury did not consider Holmes’ relationship with her COO. After a lengthy deliberation, Holmes was found guilty on 4 of 11 counts of defrauding and conspiring to defraud investors, but not patients. Months later, Balwani was convicted on all counts.

• Theranos founder Elizabeth Holmes testifies in her own criminal trial (November 2021)
• Elizabeth Holmes convicted of 4 of 11 fraud counts in Theranos trial (January 2022)
• Former Theranos exec Sunny Balwani is found guilty of fraud (July 2022)
• Elizabeth Holmes sentenced to 11 years in prison for Theranos fraud (November 2022)
• Theranos exec Sunny Balwani sentenced to 13 years in prison for defrauding patients and investors (December 2022)
• Elizabeth Holmes is denied request to stay out of prison (April 2023)
• Theranos founder Elizabeth Holmes isn’t headed to jail tomorrow after all (April 2023)
• Time’s up for Elizabeth Holmes (May 2023)

Aftermath
What can we learn from one of the worst startup failures? Avoid fraud. We have additional ideas. Here’s what Theranos says about the tech industry and Silicon Valley’s history.