Theranos founder Elizabeth Holmes<\/a> just suffered a major legal setback because a federal appellate panel upheld her fraud convictions. A three-judge panel of the 9th U.S. Circuit Court of Appeals on Monday affirmed the convictions, sentences<\/a> and nine-figure restitution ordered against both Holmes and Theranos president, Ramesh “Sunny” Balwani.<\/p>\n

Holmes and Balwani, who were also in a personal relationship and Holmes said<\/a> he abused her, were tried separately<\/a>. She was sentenced to about 11 years (135 months), while he was sentenced to about 13 years (155 months). According to the federal Bureau of Prisons<\/a>Holmes, 41, is in a minimum security federal prison camp in Texas with a release date in 2032, while Balwani, 59, is in a medium security facility in California with a 2033 release date.<\/p>\n

Theranos was supposedly going to revolutionize medical laboratory testing with the ability to run fast, accurate and affordable tests with just a drop of blood from a finger prick. “But the vision sold by Holmes and Balwani was nothing more than a mirage,” 9th Circuit Judge Jacqueline H. Nguyen wrote for the panel<\/a>adding that the “grandiose achievements touted by Holmes and Balwani were half-truths and outright lies.” <\/p>\n

Holmes was convicted<\/a> of crimes related to fraud against investors while the jury acquitted her or hung on other counts. Balwani was convicted on all counts<\/a> at his trial.<\/p>\n

The federal panel rejected a slew of arguments<\/a> from both defendants, including that their trials featured improper testimony from Theranos employees. While the ruling is a major setback for the defendants, they can further appeal to a fuller panel of 9th Circuit judges<\/a> and the Supreme Court, which generally has broad discretion<\/a> over whether to accept cases for review.<\/p>\n

Subscribe to the<\/strong>Deadline: Legal Newsletter<\/strong><\/a>for expert analysis on the top legal stories of the week, including updates from the Supreme Court and developments in Donald Trump’s legal cases.<\/strong><\/p>\n<\/div>\n

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Jordan Rubin<\/a><\/span><\/span><\/a><\/span><\/a><\/span><\/p>\n
Jordan Rubin is the Deadline: Legal Blog writer. He was a prosecutor for the New York County District Attorney’s Office in Manhattan and is the author of “Bizarro,” a book about the secret war on synthetic drugs. Before he joined BLN, he was a legal reporter for Bloomberg Law.<\/p>\n<\/div>\n
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