Elizabeth Holmes, the disgraced CEO of the now-defunct blood-testing company Theranos, has recently filed a court document claiming that she cannot afford to pay the $250 per month restitution ordered by a federal judge.
Holmes, who was once considered a rising star in the Silicon Valley tech industry, is currently awaiting trial on charges of fraud and conspiracy. She and her former partner, Sunny Balwani, are accused of deceiving investors, patients, and medical professionals about the effectiveness and accuracy of the blood tests conducted by their company.
The government alleges that Holmes and Balwani knew that their technology was flawed and provided false information to investors and the public in order to raise over $700 million in funding for Theranos. The company eventually collapsed in 2018, and both Holmes and Balwani were indicted on multiple counts of fraud.
In September 2020, a federal judge ordered Holmes to pay $500,000 in restitution to the victims of her scheme. She was also ordered to surrender her Theranos shares, pay a $100,000 fine, and serve a potential prison sentence of up to 20 years.
However, in a court filing submitted on Monday, Holmes stated that she is unable to make the monthly restitution payments. Her attorneys argued that her current financial situation was complicated by “legal fees and expenses [that] have exhausted her funds and impeded her ability to pay any restitution.”
The filing also stated that Holmes had “no meaningful income” and only had $135,000 in assets, which she claimed were primarily composed of personal items, such as furniture and clothing.
Holmes’ claim of financial hardship has drawn criticism from some quarters. Many have pointed to her lavish lifestyle during the height of her tenure as Theranos’ CEO, which included a $5,000 per month rent on a luxury home, private jet travel, and a personal staff of assistants and security personnel.
In response, Holmes’ attorneys contended that the expenses were necessary for her role as CEO and that she is now struggling to “make ends meet.”
The judge in charge of the case has not yet ruled on the matter, although some have speculated that the claim of financial hardship may be used by the defense to argue for a reduced sentence if Holmes is found guilty.
Regardless of the outcome, the case has once again drawn attention to the dangers of unchecked ambition in the tech industry and the need for greater transparency and accountability in the startup world. As the saga of Theranos and Elizabeth Holmes continues to unfold, it is clear that the fallout from her alleged fraud will be felt for years to come.