Former Theranos CEO Elizabeth Holmes, who was estimated to have a personal wealth of $US4.5 billion in the heyday of her failed fraud of a blood testing company, can’t afford to pay the victims she bilked $US250 ($347) per month in restitution, her attorneys said this week.
The Justice Department said in a court filing it wanted Holmes to pay the monthly $US250, or at least 10 per cent of her income, to victims of Theranos after she gets out of prison. The 39-year-old founder reported to a federal prison in Texas last week to begin serving an 11-year sentence for her central role in the fraud at her former company, which claimed its proprietary device was able to carry out various medical tests and detect diseases with only a few drops of blood. The device did not work.
However, in a legal filing this week, Holmes’ attorneys argued that the former Theranos CEO had “limited financial resources” and asked a judge to deny the Justice Department’s recent motion to add the $US250 per month payment to her restitution schedule. Holmes and former Theranos COO Ramesh “Sunny” Balwani have likewise been ordered to pay $US452 million in restitution to victims of Theranos.
As it stands, Holmes is required to pay victims $US25 every three months while she’s in prison. According to the Associated Press, the Justice Department filed a motion to add the $US250 ($347) per month restitution payments after Holmes got out of prison and said not including this schedule had been a “clerical error.”
“Ms. Holmes’ Amended Judgment already includes a restitution schedule that begins while she is incarcerated. There is no indication in the record that the absence of a change to the schedule after she is released was a clerical error,” Holmes’ lawyers wrote.
Holmes is married to the heir to a luxury hotel chain, Billy Evans, with whom she has two small children. He attended her trial in support and has visited her in prison. She claims she lost all her wealth after Theranos collapsed and that she has “no assets” and no hope of working in her sector in the future. Both Holmes and Balwani have stated that their millions of dollars in legal bills have left them nearly broke.
The Justice Department’s proposed restitution schedule for Holmes after prison would be similar to Balwani’s, who is serving a 13-year prison sentence in California for his role in Theranos. Balwani is expected to pay $US1,000 ($1,388) per month in restitution after he gets out of prison, the AP reported.