Elizabeth Holmes objects to paying victims $250 a month after prison
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Convicted entrepreneur Elizabeth Holmes cannot afford to pay her victims $250 a month when she leaves prison, attorneys for the onetime billionaire and Theranos founder said in a court filing this week. Wp Get the full experience. Choose your plan ArrowRight Holmes has “limited financial resources” and should not be forced to make the payments, the filing said. The move comes a week after the Justice Department filed a motion to correct a “clear error” that left Holmes’ payment schedule for restitution blank.
Holmes is jointly responsible for making $452 million in restitution with Ramesh “Sunny” Balwani, a former business and romantic partner at the defunct blood-testing start-up. Holmes’s attorneys argued that the lack of a payment schedule was “not inadvertent,” citing the difference in treatment between Balwani, who was convicted on 12 counts of defrauding investors and ordered to pay a $25,000 fine, and Holmes, who was convicted on four counts of fraud and paid no fine.
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“The Court had before it substantial evidence showing Ms. Holmes’ limited financial resources and has appropriately treated Ms. Holmes and Mr. Balwani differently in sentencing; and the Court issued the Holmes and Balwani Amended Judgments within twenty minutes of each other, which suggests any differences between the two judgments were not inadvertent,” the filing said.
Holmes reported to a Texas prison camp May 30. While incarcerated, she will make restitution payments of $25 every three months, court filings show. She was sentenced to more than 11 years in prison.
After her release, Holmes should pay victims $250 a month or 10 percent of her wages, whichever is greater, prosecutors argued in court filings. The victim owed the largest sum is Rupert Murdoch, who had invested $125 million in Theranos.
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Though her wealth was once estimated as high as $4.5 billion, Holmes’s attorneys claim she has “essentially no assets of meaningful value” following the collapse of Theranos, which went defunct after it was revealed Holmes had been lying about the company’s blood-testing capabilities. She was found guilty of four counts of wire fraud and conspiracy to commit fraud against the company’s investors.
Even if Holmes is forced to pay the $250 monthly installments, it’s unlikely to put a dent in the $452 million total owed by her and Balwani to investors. But the size of the monthly payments is not unusual, said Eugene Gorokhov, a defense lawyer specializing in white-collar crime.
“The restitution system is designed to be applied generally — one size fits all, ” Gorokhov said. “It obviously breaks down when you apply it to outliers like Holmes who owe an eye-popping amount.”
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Balwani will be responsible for $1,000 per month in restitution payments once released from prison.
Holmes founded Theranos in 2003 while a student at Stanford University. She later dropped out of school, pouring her energy into the blood-testing start-up and adopting a persona that included black turtlenecks reminiscent of the wardrobe of Apple founder Steve Jobs. At its height, Theranos was valued at $9 billion and attracted prominent investors including Larry Ellison and Murdoch. Political figures such as Henry Kissinger and Jim Mattis sat on the company’s board.
If Holmes were to sign a book or movie deal after being released from prison, her restitution would probably be reworked to seize more than 10 percent of that income, Gorokhov said.
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Source: The Washington Post
