Elizabeth Holmes has had several unsuccessful attempts to move her time behind bars. She is the founder of Theranos. She was convicted of a major hoax. Holmes eventually disclosed herself to a federal prison.
She was sentenced to over 11 years in prison. She and former business partner Ramesh Balwani were
ordered to pay $452 million to the investors they defrauded. Balwani is already serving a 13-year prison sentence in California.
That’s a hefty sum for the former billionaire. Now he claims he doesn’t have enough money to pay his own lawyers.
The US federal court often makes a decision that defendants pay damages.
It is about refunding money to victims who lost money or property.
For Elizabeth Holmes, she has to pay damages to some of the wealthiest families in America.
Holmes, 39, was convicted last year of four counts of fraud related to her botched initiation of blood testing.
In mid-May, the court denied her request to remain free on bail pending a challenge to the original conviction.
He will serve his sentence in a minimum security prison in Texas.
Holmes reported to a federal facility in Bryan, Texas, on Tuesday. There are between 500 and 700 prisoners in that prison.
The prison is about 100 miles north of Houston. It’s her hometown.
Her arrival at the facility was confirmed by the Federal Bureau of Prisons. The institution refused to give more details about its closure. The reason is to protect her privacy.
Holmes was previously billed as the world’s youngest self-made billionaire. Now she could work alongside other inmates for between 12 cents and $1.15 an hour. A large portion will go towards paying her trustees.
She dropped out of Stanford University. Then she founded the company Theranos. The value of the company is estimated at nine billion dollars.
Among the investors were, among others, Henry Kissinger and the Walton family. The Waltons are known for founding the Walmart supermarket chain.
Former Secretary of Education Betsy DeVos invested about 100 million dollars in her company.
Many lost fortunes when it was discovered that her technology did not work.
Elizabeth Holmes must now repay media tycoon Rupert Murdoch $125 million.
Experts say I will not write her debts off if she declares bankruptcy.
The victims of her fraud should not hope to recover the invested money.
Refunds in America are symbolic. This means that there is little chance that Theranos investors will recover what they are owed.
“There are very few people in the world, like, say, Bernie Madoff, who can pay full compensation,” says Ryan O’Neill, a former federal prosecutor.
“That number is at the level of statistical error.”
Holmes is still expected to pay those people, she adds.
Prosecutors have already begun freezing her money in the bank. Also, all property owned by her.
They will compare the amount of money in the accounts to the amount she claims to have. The figures will not match, the prosecutor believes.
The Theranos founder’s debts won’t stop growing after she serves her prison sentence.
A judge ordered her to report to a federal prison in Bryan, Texas. All prisoners are required to work for between 12 cents and one dollar and 15 cents an hour.
Half of the paltry sum she will earn, $25 every four months, will go to those she harmed, says Randy Zelin, a professor at Cornell Law School.
Even when she serves her sentence and is released, Elizabeth Holmes cannot own some important things like a house.
The only thing the government can’t do is seize real estate that is solely owned by her husband, William Evans. Let’s say it’s a hotel.
Holmes is aware of her own financial future.
So earlier this month, she told the New York Times that she “will have to work for the rest of her life” to pay millions of dollars in legal damages.
However, there are several reasons the injured party will most likely not get their money back.
The defendants rarely want to “get rich” again, O’Neill points out.
“They know where the money will go,” he adds.
Some will try to hide assets.
John Potow, a professor at the University of Michigan Law School, says that some trust money in certain trusts to prevent those assets from being taken from them.
“The richer you are, the easier it is for you to create legal screens to hide your wealth.”
Experts recall the case of conspiracy theorist Alex Jones, who had to pay almost a billion dollars to the families of the victims of the Sandy Hook school shooting, for spreading lies about the massacre, which is claimed to have led to the violence.
Jones, who has declared bankruptcy on both his business and personal fronts, is accused of funneling money to friends and family to hide his wealth.
Although prosecutors will follow his steps, O’Neill says that even these families, who are not as wealthy as the victims of Elizabeth Holmes, the host of the right-wing show InfoWar (InfoWar) will not pay compensation, because he will give most of the money to lawyers.
The US government does not have the resources or time to investigate each case individually, shifting the responsibility towards the victims, according to Professor Zelin.
Given the Elizabeth Holmes case and her recent financial choices, such as paying $13,000 a month in rent for a mansion in Silicon Valley, former Theranos investors will continue to eye her, demanding their money back from prosecutors, experts say.
“They won’t stop looking.”
“She will not leave a dollar in the trash without the government taking it,” added prosecutor O’Neill.
