Elizabeth Holmes, once worth $4.5 billion, says she can't afford to pay victims $250 a month (2024)

By Irina Ivanova

Updated on: June 14, 2023 / 11:13 AM EDT / MoneyWatch

Elizabeth Holmes begins 11-year prison sentence

Lawyers for Elizabeth Holmes are resisting the government's bid to force the imprisoned Theranos founder to repay victims of her fraud, claiming she won't be able to afford the payments.

Holmes was convicted of defrauding investors in Theranos and ordered to repay $452 million to victims, who include backers such as News Corp. Chairman Rupert Murdoch and Oracle CEO Larry Ellison.

Holmes is jointly liable for the amount with Ramesh "Sunny" Balwani, her ex-boyfriend and Theranos' former chief operating officer, who was sentenced to a term ofnearly 13 years in prison for his role in the fraud.

However, Holmes' financial judgment doesn't include a payment schedule aside from requiring her to pay $25 a month while in prison. The Justice Department last week filed a motion to correct that, calling the omission a "clerical error." In their filing, the Justice Department's lawyers proposed that Holmes pay $250 a month, or at least 10% of her income, once she's released from prison.

Elizabeth Holmes, once worth $4.5 billion, says she can't afford to pay victims $250 a month (2)

That's similar to Balwani's judgment, which requires him to pay $1,000 a month once he's out.

But Holmes' lawyers pushed back forcefully, citing Holmes' "limited financial resources."

"Mr. Balwani's amended judgment says nothing about what the Court intended for Ms. Holmes' restitution schedule. Ms. Holmes and Mr. Balwani have different financial resources and the Court has appropriately treated them differently," they wrote in a filing Monday.

They noted that while the court fined Balwani $25,000, it did not impose a fine on Holmes.

Holmes, who was worth $4.5 billion at Theranos' peak, says she lost it all when the company's valuation collapsed after revelations it was lying about its capabilities. She has claimed in court filings that she has "no assets" and no hope of restarting her career after the Theranos scandal.

Holmes started serving her 11-year sentence last month at a minimum-security facility in Bryan, Texas, leaving behind her husband, hospitality heir William Evans, and their two small children.