Elizabeth Holmes has at least one more chance to stay out of jail after a judge on Friday sentenced the aspiring biotech entrepreneur to 11 years and three months behind bars for defrauding a group of investors in her testing startup blood vessels collapsed, Theranos.
Holmes’s freedom hinges on an expected appeal of his case, which his lawyers are due to file within two weeks. Once an appeal is filed, Holmes can ask to remain out of custody while his appeal is considered by the 9th Circuit Court of Appeals.
George Demos, a former U.S. Securities and Exchange Commission prosecutor, says there’s “no doubt” the fallen Silicon Valley superstar will file an appeal. Only after this request – as well as a request to remain free during her penance – will it be clear whether she will begin serving Davila’s sentence.
“So it remains to be seen whether or not she will report to jail on April 27,” Demos said.
Still, avoiding incarceration altogether is an uphill battle.
First, she should persuade Judge Edward Davila – who handed down her sentence and presided over her trial – as well as the trial of her co-defendant Ramesh “Sunny” Balwani – that she deserves not to be detained while her appeal proceeds in the higher court.
Second, she should succeed in her appeal. Even the appeals court cannot overturn Davila’s sentence unless it finds that he miscalculated Holmes’ sentence under the US Sentencing Guidelines.
On the first point, Kyle Clark, a criminal defense attorney at Baker Botts, said it was difficult to predict how Davila would respond to a request from Holmes for continued freedom.
“If there is a call, sometimes they will prevent people from entering [of prison] pending appeal, and sometimes they put them in jail, even if there’s an pending appeal,” Clark said.
In making that decision, Judge Davila would be tasked with considering many of the same factors that determined whether to allow Holmes to remain free on bail post-charge and into his sentence, such as whether or not his crime involved violence, her lack of a criminal history, and whether she is a flight risk.
“The judge may be willing to convict her, but hold her off while her appeal fails,” Clark said. “Although the position of the government on this is also important.”
Clark said he expects prosecutors to point out that the lengthy appeals process could set Holmes back for years from serving his sentence.
“That’s one of the things the government is going to say – that she should go to jail while the appeal is pending,” Clark said. “Sometimes it works, sometimes it doesn’t.”
Grounds for appeal
The grounds Holmes can cite to justify an appeal remain unclear.
Appeals may be based on rulings on testimony and evidence, whether the judge’s rulings during the actual trial are consistent, and whether Holmes was granted or denied the opportunity to present exculpatory evidence.
However, Clark and other lawyers who spoke to Yahoo Finance say Holmes’ chances of the appeals court overturning the jury verdicts or Davila’s sentence are slim given the case’s narrow handling. by Davila, which helped preserve a fair trial.
“The judge judged this case very carefully,” Jacob Frenkel, a white-collar criminal defense attorney, told Yahoo Finance in January, immediately after the jury returned its verdicts after seven days of deliberation. “An appeal is unlikely to result in a change in sentence.”
Frenkel also pointed out that Holmes, by speaking out at his trial, may have helped seal his fate on appeal.
“The fact is, testified Elizabeth Holmes. It was a gamble,” he said. “And ultimately the jury made its decision largely on whether or not they believed Elizabeth Holmes. So I think the appeal is going to be difficult for the defense.
After reading Holmes’ sentence in a crowded courtroom on Friday, Davila said he would also give Holmes an additional five months of detention before April 27, when she must surrender to incarceration. Holmes, 38, is now pregnant with her second child.
“It’s important,” Demos said, pointing out that Judge Davila had actually taken note of the five-month delay. “I believe it’s designed to give her the ability to give birth outside of prison, which is a compassionate and humane thing to do. And I hope that will lead to reforms throughout our prison process.
How long will Holmes serve?
If Holmes appeals and fails to persuade Davila or the appeals court to reverse what was done, Demos says she will likely have no choice but to serve most of the sentence Davila pronounced. The provisions of the federal sentencing guidelines provide for the possibility of early release for good behavior.
“It remains to be seen whether she will serve 11 years or not, but I would suspect that she will serve a substantial part of it,” he said.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
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