Who`s Paying Elizabeth Holmes Legal Fees

Holmes said in her verdict that she had filed for bankruptcy and had no money to make amends. Investigators determined, prosecutors say, that Holmes has “modest assets” offset by $450,000 in loans taken out to pay his $500,000 settlement with the U.S. Securities and Exchange Commission, and his “liability for attorneys` fees of more than $30 million.” Investigators have not been able to determine whether third parties are responsible or likely to pay Holmes` attorney fees. Theranos had paid the million-dollar monthly bills of Holmes and the company`s former president, Sunny Balwani, Vanity Fair reported, citing two former company executives. But a few months after Holmes and Balwani were charged with fraud, the company was dissolved, handed over all assets and intellectual property to an investment firm and said its remaining $5 million in cash would go to unsecured creditors. The lawyers may have received money in advance to represent Holmes before Theranos went bankrupt, David Ball, a law professor at Santa Clara University, told the news agency. However, a 2015 Wall Street Journal investigation questioned the effectiveness of Theranos` blood testing services and also shed light on some of Holmes` questionable management tactics and attempts by the company`s legal team to heavily arm its critics. Facing a barrage of lawsuits, Holmes was forced to shut down Theranos in 2018, and she and her former partner Ramesh “Sunny” Balwani were charged with fraud earlier this year. After the dramatic collapse of her business, she agreed to a $500,000 fine to settle a federal securities regulator civil case, and also settled an investor lawsuit for an undisclosed sum, in addition to legal fees she had to pay that were not covered by Theranos` business insurance.

Legal experts say Holmes faces significant financial risks from the lawsuit against her, with legal fees in addition to potential refunds for investors, fines and jail time. Related Articles | Elizabeth Holmes` former partner, Ramesh “Sunny” Balwani, is sentenced to nearly 13 years in the Theranos Technology case| Elizabeth Holmes could get out of jail for a year or more: Legal Experts Technology | Theranos founder Elizabeth Holmes sentenced to more than 11 years in prison for fraud | Technology In photos: The rise and fall of Elizabeth Holmes | Elizabeth Holmes faces `terrifying` separation of toddler and newborn in prison Prosecutors demand in the memo that Holmes pay the $804 million to cover all investor losses, but acknowledge that “the size of the repayment could dwarf Holmes` ability to pay.” Holmes was found not guilty of deceiving patients, but prosecutors want his verdict to be responsible for his alleged recklessness in patient safety. “When the money dried up, she went to market with an unproven and unreliable medical device,” prosecutors said in the memo. “Women were given fake tests on their pregnancies, Theranos got fake results for cancer screening tests, and one victim was tricked into believing she had the virus that causes AIDS.” “It is possible to try to enjoy the benefits of the defense as presented by the co-accused`s lawyer,” Portanova said. In a recent court filing, Holmes` lawyers, who represent them against the plaintiffs in a class-action lawsuit, are trying to pull out of the case, saying they haven`t been paid by Holmes in nearly a year. According to the Washington Post, three attorneys from Cooley LLP, the Palo-Alto-based litigation firm that is representing Holmes in the lawsuit, are trying to pull out of the case, saying the firm “does not expect Ms. Holmes to always pay for her services and counsel.” To keep a criminal defense team from a top-notch firm, Holmes may have had to make a substantial down payment, according to Barbara McQuade, a former federal prosecutor who now teaches at the University of Michigan Law School. Consumer advocates, meanwhile, may have their own motivation for suing Holmes, no matter how much they currently think they`re worth, Portanova said. The founder of outraged blood testing startup Theranos is now accused of skipping the bills of lawyers defending her in a civil lawsuit against fraud allegations.

Holmes, 38, founded Theranos in 2003 at the age of 19 and made herself and the company nationally known by falsely claiming that her machines could perform a whole host of tests with just a few drops of blood. A series of Wall Street Journal presentations led to the company`s demise and federal indictments in 2018 against Holmes and his former romantic partner Sunny Balwani, who was Theranos` chief operating officer. No trial date has been set for the civil lawsuit against Holmes, Theranos and Walgreens, who offered Theranos` blood testing technology in Arizona and California. The lawsuit was filed on behalf of consumers who paid for Theranos` blood testing service. Holmes` allusions to investors that their testing machines were used on the battlefield by the U.S. military also receive special attention in the memo. Texas real estate mogul Craig Hall, who invested nearly $5 million in Theranos, filed a victim impact statement saying his sentence should take into account his “deliberate decision” to take advantage of investors` “bowel” for military personnel. “Holmes` actions were abhorrent and un-American,” Hall wrote.

“She earned hundreds of thousands of dollars in annual salary,” the prosecutor`s memo reads. “She was traveling in a private jet paid for by Theranos. She and Balwani ruled Theranos from a $15 million mansion in Atherton. She had dinner at the White House. and at the height of the scam, he was named one of the 100 most influential people in the world by Time (magazine). Dwyer and attorneys for Williams & Connolly, representing Holmes in the criminal case, did not respond to emails and phone calls seeking comment.