Elizabeth Holmes’ Fraud Conviction Upheld by Ninth Circuit (1)

Elizabeth Holmes lost her last-ditch effort to overturn her 2022 fraud conviction when a federal appeals court Monday upheld the judgment against the disgraced Theranos Inc. founder.

A three-judge panel for the US Court of Appeals for the Ninth Circuit in San Francisco also upheld the conviction of her former business and romantic partner Ramesh “Sunny” Balwani, and it upheld the $452 million restitution order the duo must pay to 14 vicitims.

Judge Jacqueline H. Nguyen, writing for the unanimous court, largely rejected arguments by Holmes and Balwani that prosecutors’ key witnesses were improperly vetted by the trial judge, and that their testimonies were “infected with error.”

The ruling bookends a yearslong Silicon Valley drama over the blood testing startup that took the industry by storm with Holmes’ celebrity appeal and a $9 billion valuation. The company collapsed after news reports exposed the testing technology as a failure, a scandal that inspired books, films, and podcasts.

Holmes was convicted in 2022 on four counts of wire fraud relating to false claims she made to investors after a jury trial in the US District Court for the Northern District of California. She is serving an 11-year sentence in a minimum security prison in Texas.

Holmes asked the Ninth Circuit to toss out her conviction and grant a new trial, arguing that prosecutors used Theranos’ final lab director, Kingshuk Das, as a scientific expert on the company’s blood testing device called the Edison even though he was only a lay witness. Holmes’ attorneys argued that he was never properly vetted by the judge as someone who could provide an expert scientific opinion.

The Justice Department countered that Das wasn’t providing an expert opinion, but rather testifying about what was he saw at Theranos while he worked there and what he told Holmes at the time.

And even if Holmes won her argument, she hadn’t challenged volumes of other evidence that pointed to her guilt, including her lies about Theranos’ financial health, work with the military, and partnership with Walgreens Co., prosecutors argued.

Nguyen agreed with Holmes that the trial judge failed to vet Das, but said the error was harmless.

“It is not likely however that the admission of Das’s opinion testimony affected the jury’s verdict, given the weight of other evidence against Holmes,” Nguyen said.

The judge said the challenged testimony of other former Theranos employees was also harmless.

Attorneys for Holmes and Balwani didn’t immediately return requests for comment.

Andrew George, a white collar defense attorney at Bourelly George & Brodey PLLC who has been following the case, said Holmes faced an uphill battle from the start given the “substantial evidence” of her investor fraud. “Just as this was a tough case to defend at trial, it was a tough one for appeal,” he said.

Judges Mary M. Schroeder and Ryan D. Nelson joined the opinion.

Williams & Connolly LLP represents Holmes. Corr Cronin LLP and Orrick Herrington & Sutcliffe LLP represent Balwani.

The case is USA v. Holmes, 9th Cir., No. 22-10312, 2/24/25.