Jailed Theranos CEO Elizabeth Holmes claims she won’t be able to afford restitution payments of $250 a month to victims of her massive fraud when she’s released from prison.
Holmes’ lawyers insisted before a judge that the disgraced Theranos founder has “limited financial resources” that will make it difficult for her to make her restitution payments, according to Bloomberg.
Aside from having to spend more than a decade in federal prison, Holmes and her ex-boyfriend — former Theranos COO Ramesh “Sunny” Balwani — were ordered to pay $452 million in restitution to the investors who bought into their claims of a revolutionary diagnostic tool using a fingerprint.
Theranos investor and media mogul Rupert Murdoch — chairman of News Corp., the publisher of The Post — is owed $175 million of those funds, while lesser amounts will be distributed to 13 other fraud victims — including $40 million to Walgreens and $14.5 million to Safeway.
Holmes is being held jointly liable for the lump sum, as Balwani is already in prison after being convicted on a broader range of felonies in a separate trial.
Federal prosecutors noted a clerical error earlier this month because the court filing regarding the restitution didn’t specify a payment schedule.
US District Judge Edward Davila — who presided over both Holmes and Balwani’s trials — corrected the paperwork to require Holmes to make monthly payments once she finishes out her 11-year sentence at Federal Prison Camp Bryan, a low-security federal facility for women just northwest of Houston.
Holmes’ lawyers asked Davila on Monday to reject the prosecutors’ proposed correction, citing “substantial evidence showing Ms. Holmes’ limited financial resources,” according to Bloomberg.
The claim is common in large financial frauds, but the government is required to seek restitution, and a payment schedule like the one Holmes is being held liable for is typical in ensuring convicts make an effort, the outlet reported.
Holmes’ legal counsel also accused the judge of having “treated Ms. Holmes and Mr. Balwani differently in sentencing.”
They noted that Balwani was ordered to pay a $25,000 fine, while Holmes was on the hook for the nine-figure sum, which she can’t afford to pay.
Davila ordered Balwani to pay back his fine in quarterly payments of $25 while incarcerated and at least $1,000 monthly, or at least 10% of his earnings, once free.
The Post reached out to Holmes’ representatives at Williams & Connolly for comment.
Holmes turned herself in at a federal prison in Texas two weeks ago to begin her 11-year and 3-month sentence for swindling doctors and patients to use her company’s blood-testing services while knowing that Theranos was incapable of producing accurate results, according to the indictment.
She was also accused of defrauding investors of more than $700 million with the made-up claims.
Before her house of cards came tumbling down, Holmes had a net worth of $4.5 billion at just 30 years old, according to Forbes. As of 2023, that figure has fallen to $0.
In a profile on Holmes in May ahead of her surrender, she told The New York Times that she “can’t” pay her legal expenses, and would “have to work for the rest of my life to try to pay for it,” she added.
When asked if her husband’s family helped in paying legal fees, she reportedly shook her head no.
Holmes’ spouse, Billy Evans, is the heir to the prominent Evans Hotel Group in San Diego.
Holmes even had a legal team quit representing her in 2019 after she failed to pay her law firm bills for more than a year. A pre-sentencing report estimated her legal fees to be more than $30 million, The Times reported.
The 39-year-old, now known as federal 24965-111, was seen crying alongside Evans during his first visit to the prison camp.
One picture showed Holmes walking alongside Evans and clinging to one of his fingers — an embrace that appeared to violate the prison’s policy against prolonged physical contact.
Holmes and Evans have two young children together, a son William and a daughter Invictus.
They lived with their children in a $9 million mansion in San Diego. Now, at FPC Bryan, Holmes is expected to share four-person bunk rooms, where inmates are woken up at 6 a.m. for food service duties or factory jobs, earning between 12 cents and $1.15 per hour.
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Elizabeth Holmes claims she won't be able to afford $250 a month in restitution payments after prison release - New York Post
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