Theranos fraudster Holmes told by judge to repay Murdoch $125m
CONVICTED fraudster Elizabeth Holmes and her Theranos co-founder must repay $125m (£100m) to Rupert Murdoch as part of restitution for their crime, a judge has ordered.
Holmes and her ex-boyfriend and business partner Ramesh “Sunny” Balwani must hand the sum over as part of court-ordered $452m restitution.
The money will go to investors who the pair deceived into backing Holmes’s tech start-up, Theranos. Mr Murdoch invested a reported $100m in the company between 2014 and 2015 while its valuation and prominence was soaring.
Other high-profile figures including Henry Kissinger and Bill Clinton also backed Holmes’s start-up.
The sum Holmes and Balwani have been told to repay Mr Murdoch is the single largest part of the restitution order. Lawyers for Holmes and Balwani have argued that the pair have little money and it is unclear whether they will ever be able to repay the full $425m. The restitution order was handed down as a judge refused Holmes’s request to remain free while she appeals against her 11-year prison sentence for fraud.
Holmes has argued that her original trial was unfair.
Judges from the US 9th Circuit Court of Appeals denied the request to stay out of prison on Tuesday.
Theranos was once one of Silicon Valley’s most feted start-ups, valued at more than $9bn at the peak of its success. The biotech company, which Holmes founded when she was 19, promised to deliver revolutionary technology that would detect hundreds of diseases and other ailments with just a few drops of blood.
Holmes, who became known for wearing Steve Jobs-style black turtleneck sweaters, claimed to be a selfmade billionaire by the age of 30.
However, the company spectacularly collapsed amid claims of fraud. A series of reports by The Wall Street Journal, a newspaper owned by Mr Murdoch, exposed how bosses were secretly sending blood tests to traditional laboratories instead of using Theranos’s signature blood-testing machines.
Mr Murdoch is said to have subsequently emailed The Wall Street Journal calling himself “one of a bunch of old men taken in by a seemingly great young woman”, The New York Times reported. As part of the restitution order, Holmes and Balwani must also hand back $40m to pharmacy chain Walgreens, which invested in Theranos in 2013 after agreeing to provide its blood-testing kits in some of its 9,000 US stores. Another $14.5m is owed to supermarket giant Safeway, which had also agreed to be a Theranos business partner before ultimately backing out.
Holmes was sentenced to 11 years in prison in November last year. Balwani was sentenced to almost 13 years in jail.