Judges hear Elizabeth Holmes’ appeal of fraud conviction while she remains in Texas prison

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SAN FRANCISCO (AP) — A panel of federal judges spent two hours Tuesday wrestling with a series of legal issues raised in an attempt to overturn the fraud conviction that sent Theranos CEO Elizabeth Holmes to prison after a meteoric rise to stardom in Silicon Valley.

The hearing in San Francisco Court of Appeals came nearly two and a half years after a jury convicted Holmes of organizing a blood-testing scam that has become a tale of greed and arrogance in Silicon Valley. Holmes' instrument of deception was Theranos, a Palo Alto, Calif., startup she founded shortly after leaving Stanford University in 2003 with the goal of revolutionizing the health care industry.

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Holmes, who did not attend the hearing, is currently serving an 11-year prison sentence in Bryan, Texas.

But Holmes' parents and her partner Billy Evans – the father of her two young children – sat in the front row of the courtroom listening intently to the oral arguments. All three federal prosecutors who presented the US Department of Justice's case during the original four-month trial were sitting in the courtroom, including lawyers Jeffrey Schenk and John Bostic who have since gone on to work at private law firms.

Three appeals court judges — Jacqueline Nguyen, Ryan Nelson, and Mary Schroeder — offered little evidence on whether they were inclined to uphold or overturn Holmes' conviction. However, they periodically made clear that it would take overwhelming evidence to overturn a jury verdict.

Nelson appeared to be the most divided of the three justices, showing some sympathy when Holmes' attorney, Amy Saharia, said the outcome of her trial deserved close scrutiny because the jury also acquitted her of four other counts of fraud and conspiracy on which it could not reach a verdict. Three other charges.

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Before adjourning the hearing, Nguyen said a ruling would be issued “at the appropriate time” without providing a specific timetable. Appeals courts can take from a few weeks to more than a year before ruling on appeals involving criminal convictions.

Holmes will remain in prison, and is currently scheduled for release in August 2032, before the end of her full sentence due to her good behavior thus far.

A decade ago, Theranos became a hot commodity in health care, even being described by several prominent people as a model of American ingenuity, including then-Vice President Joe Biden. Holmes has emerged as a media sensation with a fortune of $4.5 billion.

The excitement arose from Holmes' claim that devices designed by Theranos could screen a few drops of human blood for hundreds of potential diseases. But the devices produced unreliable results, which both Holmes and her former business partner and lover at the time, Ramesh “Sunny” Balwani, tried to hide.

Once the glaring flaws in its technology were revealed, Theranos collapsed in a scandal that led to criminal charges against both Holmes and Balwani. Prosecutors hoped to break the “fake it 'til you make it” mentality embraced by Silicon Valley entrepreneurs who hoped to strike it rich with products that were still crowding the wagons.

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Besides hearing from Holmes' lawyers on Tuesday, the panel of appellate judges also heard arguments from another group of lawyers representing Balwani, who is trying to overturn the 13-year prison sentence he received after his July 2022 conviction on fraud and conspiracy charges in a separate case. trial.

Balwani, 58, alleges that federal prosecutors distorted evidence to bias the jury against him while spinning a different narrative than the one they presented during Holmes' trial, which was completed shortly before Balwani's trial began in March 2022. Unlike Holmes, Balwani was convicted on all charges. He faces 12 felony counts of fraud and conspiracy, a factor that contributed to his lengthy prison term. He is currently scheduled for release from a federal prison in Southern California in November 2033.

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