Texas Judge Proposes Prison Camp for Theranos Founder Elizabeth Holmes

A federal judge has recommended that Theranos Inc. founder Elizabeth Holmes serve her more than 11-year sentence in a minimum-security prison camp in Texas, according to new court filings.

U.S. District Judge Edward Davila oversaw the trial and sentenced her on Friday. He ordered Ms. Holmes to surrender to the facility in April and recommended that she be allowed family visitation, saying that it enhanced the possibility for rehabilitation. Upon release, Ms. Holmes would serve three years under court supervision, the judge said.

Federal prosecutors have said that Ms. Holmes could potentially receive a 15% reduction on her prison sentence for good behavior, which would put her sentence at 9 1/2 years with no possibility for parole.

Ms. Holmes has 14 days from her sentencing to appeal her conviction. Her lawyers said in court Friday that they would seek to let her stay out of prison on bail pending the outcome of her appeal. If her appeal is successful, she will be able to avoid serving her prison sentence.

The Bureau of Prisons is responsible for determining where an offender will be assigned, taking into account a number of factors such as judicial recommendations.

Ms. Holmes was convicted by a jury in January of four counts of criminal fraud for deceiving investors while running a yearslong scheme at Theranos, a now-defunct startup she founded that claimed to have revolutionized blood testing. At the sentencing Friday, Ms. Holmes said she was full of regret and that there were many decisions she would have made differently.

The prison camp is in Bryan, Texas, about 100 miles north of Houston. It is designated for female inmates and has a population of 539, according to the Bureau of Prisons website. They are allowed to accept visitors, five adults and five children at a time, on weekends. They are expected to rise at 6 a.m. each morning and are limited to clothes that are pastel green, gray or white. Before the trial, Ms. Holmes was known for wearing black turtleneck tops similar to the kind worn by late Apple Inc. founder Steve Jobs, whom she idolized.

Ms. Holmes' fall from grace was triggered by Wall Street Journal investigative reporting in 2015 and 2016. The reporting exposed how Theranos' technology didn't work, how the company tried to cover up its failures, and how patients' lives were affected. This put their health at risk.

Theranos denied the Journal's reports. The company later voided its patient tests and settled with investors and federal regulators.

Before sentencing Ms. Holmes on Friday, Judge Davila said that her lack of acceptance of responsibility for her crime would count against her. Government prosecutor

Jeff Schenk told the judge that he shouldn’t be lenient with Ms. Holmes just because there was a lot of media coverage of her sentencing, noting that the former Silicon Valley wunderkind had used the media to perpetuate her fraud while running Theranos.

Kevin Downey, an attorney for Ms. Holmes, argued that all of the money Ms. Holmes raised went into building Theranos and that she didn’t use it to buy luxury items like yachts or mansions.