Elizabeth Holmes is going to prison. Will she ever pay victims too?

Elizabeth Holmes alongside her boyfriend Billy Evans, walks back to her hotel following a hearing at the Robert E. Peckham U.S. Courthouse on March 17, 2023Getty Images

After several failed attempts to delay her time behind bars, Theranos founder Elizabeth Holmes is set to report to federal prison this week.

The disgraced entrepreneur was sentenced to over 11 years in prison and ordered to pay $452m (£365m) with her former business partner Sunny Balwani to dozens of high-profile investors they defrauded through a blood-testing start-up.

It’s a sizeable bill for the former billionaire, who has claimed she does not even have enough money to pay her lawyers.

In US federal court, convicted offenders are sometimes ordered to pay restitution.

This is a reimbursement to victims for lost income, property damage, medical expenses or other financial costs related to the crime.

In Holmes’ case, she has been ordered to pay back some of the wealthiest families in America.

After dropping out of Stanford University, she recruited several famous figures to raise money for Theranos, valued at $9bn at its peak.

Donors included former Secretary of State Henry Kissinger and the Walton family, known for founding American supermarket chain Walmart.

But after it was revealed her blood-testing technology did not work, many lost a fortune.

Former Secretary of Education Betsy DeVos reportedly gave Holmes $100m while the Theranos founder has been ordered to pay back media mogul Rupert Murdoch $125m, according to court documents.

She will not be able to just declare bankruptcy and shed her debts that way, experts tell the BBC. But victims of her crimes should not get their hopes up about recouping their cash.

They say restitution in the US has become largely symbolic, meaning Holmes’ investors – and many less wealthy victims of fraud – are unlikely to get most of the money they are owed.

Elizabeth Holmes becomes emotional in court (sketch)


“There are very few people – the Bernie Madoffs of the world and everyone else – that can pay the full amount of criminal restitution,” says Ryan O’Neill, a former federal prosecutor. “It’s sort of a fake number.”

Holmes will still be expected to try to pay these people and others she defrauded, she adds. Prosecutors have probably already begun to seize her assets, including money in the bank and properties. They will compare their own accounts of how much money she has to what she claims she possesses, which could lead to disputes, Ms O’Neill said.

The Theranos founder’s debts won’t pause when she sets foot behind bars.

A judge has recommended Holmes report to Federal Prison Camp in Bryan, Texas, where all inmates are obligated to work and make between 12 cents and $1.15 an hour.

Half of the small sum she earns – usually around $25 every four months – will go to her victims, said Randy Zelin, a professor at Cornell Law School.

Once her time in prison is finished, she will still not be able to purchase any large assets, including a home, without intervention from the federal government. The government can’t, however, seize assets owned solely by her husband, hotel heir William Evans.

Holmes has acknowledged her dismal financial fate, telling the New York Times this month she will “have to work for the rest of my life” just to pay millions of dollars in legal fees.

But there are a number of reasons why her victims and many others are unlikely to get the money back.

Criminal defendants don’t have an incentive to “make it rich” again, said Ms O’Neill. “They know where the money is going to go.”

Others may attempt to hide assets. University of Michigan Law School professor John Pottow says some try to put money in trusts to avoid asset seizures. “The richer you get, the easier it is to construct legal devices that hide your wealth.”

Experts pointed to the case of conspiracy theorist Alex Jones, who has been ordered to pay nearly $1.5bn to families of victims of the Sandy Hook Elementary School shooting for spreading lies about the massacre, which they said has led to harassment.

Alex Jones

Getty Images

Mr Jones – who has declared both personal and business bankruptcy – has been accused of funnelling money to friends and family in an attempt to hide his assets.

Ms O’Neill said that although prosecutors will be tracking Mr Jones’ moves, the Sandy Hook families – who are not as wealthy as the victims of Holmes – are unlikely to receive much money from the right-wing InfoWars host, whom she said will be paying most of his funds to his lawyers.

In lower profile cases, the US government does not have the resources or the time to investigate every defendant’s assets, sometimes putting the onus on victims to track their financial moves, Mr Zelin said.

But the headline-making nature of Holmes’ fraud – as well as her recent financial choices, including living in a $13,000 a month Silicon Valley estate – means former Theranos investors are more likely to keep watch over her and push prosecutors to get them their money back, experts said.

“They’re not going to stop looking,” Ms O’Neill said. “She’s not going to be able to put a dollar in her bank account… without the government seizing it.”


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