The one-time world’s youngest self-made woman billionaire could owe close to a billion dollars to lawyers and restitution claims, and legal analysts say the government has ways to squeeze every drop out of her.
The eye-popping story of disgraced Theranos founder Elizabeth Holmes trickled back to our collective attention last spring, when the fallen wunderkind founder was spotted traipsing around the Marina with her then-fiance (and now husband!), hotel heir Billy Evans. Elsewhere in the Thera-verse, Warner Brothers’ Jennifer Lawrence movie version of the Theranos saga has been pushed back to a 2021 release, according to Film Affinity, and Deadline reports that a Kate McKinnon TV series version is in the works over at Hulu. But the Bay Area News Group reminds us that the real-life ending of Holmes’ story will be determined in a San Jose federal court, where Holmes faces spectacular financial ruin in addition to the none-too-small matter of a potential 20-year prison sentence for defrauding investors.
Per the News Group, Holmes has been indicted on nine counts counts of criminal fraud, for which she faces as much as $2.75 million in fines. But that’s just a drop in the bucket compared to the reported $700 million in possible restitution she could owe to jilted investors. Holmes, once ranked by Forbes as “the world's youngest self-made woman billionaire” but now considered broke, has nine lawyers total — seven in the federal criminal corruption case, and two in an Arizona civil case.
The Bay Area News Group adds insult to injury, noting “Three [other attorneys] quit last fall after they said she hadn’t paid them for more than a year and probably never would.”
So if Elizabeth Holmes is reportedly broke, but could owe up to $700 million, there’s simply now way she could pay that, right? Turns out the federal government is pretty good at recovering such sums, and Holmes could have more assets than we’re currently led to believe.
“There have been famously wealthy people who have been convicted of crimes and who have managed to serve their sentence, pay their fines and still move forward with a fair amount of wealth,” Stanford Law School professor David Sklansky told the News Group. “Anybody who enters the criminal process from a position of advantage has all kinds of advantages that most criminal defendants don’t have in terms of recovering from the process and any punishment that they suffer.”
For instance: the federal government may have already seized significant assets via a secret grand jury. The government is also good at finding international accounts where suspects tend to try to hide money. And surprisingly, Theranos had paid many millions of dollars of legal fees for her before they went belly up, in addition to those of her co-defendant and ex-boyfriend Sunny Bulwani.
And on the romantic front, it’s no small matter that her hunky new husband is the heir to a hotel chain that could be pulling at least $100 million annually. Or if Elizabeth Holmes is really in dire straits, maybe she can sell her story to Hulu or Warner Brothers.
Her trial is scheduled to begin in August.