‘Skiplagging’ may get you a cheaper flight, but be aware of the risks

‘Skiplagging’ may get you a cheaper flight, but be aware of the risks
‘Skiplagging’ may get you a cheaper flight, but be aware of the risks
Craig Hastings/Getty Images

(NEW YORK) — Say you’re looking to fly from Las Vegas to Charlotte, North Carolina. The flight costs $500. But a flight from Las Vegas to Washington, D.C., with a layover in Charlotte costs only $300.

Hypothetically, a traveler could use their layover as their final destination, skipping the last leg of their trip and saving themselves some money along the way.

This practice is called “skiplagging” or “hidden city ticketing” and it’s been around for years. The company Skiplagged was even founded in 2013 to help show travelers such “hidden city” flights.

Now, with steep summer airfare and travel bouncing back to pre-pandemic rates, some people may once again be considering this option, despite any risks it could entail.

“The reality is, the way airlines price their tickets, mostly with their hub and spoke model, creates really challenging pricing for travelers that want to go to a specific hub city,” said Dan Gellert, COO of Skiplagged.com.

But the cheap price tag could come with consequences. While skiplagging isn’t illegal, many airlines prohibit and penalize the practice.

In 2014, United Airlines and Orbitz sued Skiplagged, claiming the company’s CEO, Aktarer Zaman, “used his website to intentionally and maliciously interfere with Plaintiffs’ contracts and business relations in the airline industry.”

The case was dismissed on procedural grounds in 2015 when a judge in Chicago ruled the court didn’t have jurisdiction. But Skiplagged now puts explicit warnings on its site that this type of ticketing is risky, adding this disclaimer: “Airlines don’t like when you miss flights to save money, so don’t do this often.”

“The more a traveler does it, the higher likelihood an airline is going to say, ‘Hey, you’ve missed your end destination three, four, five times,'” said Gellert. “That is going to raise some flags internally.”

Gellert added that many travelers skiplag without any issues.

Some airlines have developed software to detect skiplaggers, according to airline industry analyst Henry Harteveldt. If the airlines do catch travelers engaged in the practice, Harteveldt said, they could delete frequent flier accounts, cancel return reservations or charge them more money.

Even if the airline doesn’t catch you, there are still logistical concerns that could throw your trip for a serious loop. If your flight is canceled and you’re rerouted through another city, it’ll be a headache, and likely an additional expense, to get to your destination. And you’ll need to travel light — you can’t check luggage, and if the plane is full and your bag needs to be gate-checked, you won’t be able to retrieve it when you get out on your layover.

“Skiplagging is a very risky bet,” Harteveldt said. “If you or a member of your family gets caught, you could end up in a lot of trouble with the airline… I’m just not sure that the savings are worth the risk, even with the high airfares we’re seeing right now.”

Copyright © 2023, ABC Audio. All rights reserved.

Ring security cameras gave every employee ‘full access’ to all customer video for years: FTC

Ring security cameras gave every employee ‘full access’ to all customer video for years: FTC
Ring security cameras gave every employee ‘full access’ to all customer video for years: FTC
AaronP/Bauer-Griffin/GC Images

(NEW YORK) — Ring security cameras, the inexpensive security cameras that people can hook up in their houses or on their doors, were not fully secure for years, according to the Federal Trade Commission.

The video doorbell company allegedly “gave every employee … full access to every customer video” before 2017 and failed to patch bugs in the system that allowed hackers to access cameras and scare consumers, the FTC’s federal complaint says.

“Not only could every Ring employee and Ukraine-based third-party contractor access every customer’s videos (all of which were stored unencrypted on Ring’s network), but they could also readily download any customer’s videos and then view, share, or disclose those videos at will,” the civil complaint filed in U.S. District Court for the District of Columbia on Wednesday by the Justice Department on behalf of the FTC says. “Before July 2017, Ring did not impose any technical or procedural restrictions on employees’ ability to download, save, or transfer customers’ videos.”

The FTC says that the “dangerously overbroad access” employees received led to at least one employee viewing “thousands” of video recordings “belonging to at least 81 unique female users (including customers and Ring employees) of Ring Stick Up Cams.”

“The employee focused his prurient searches on cameras with names indicating that they surveilled an intimate space, such as ‘Master Bedroom,’ ‘Master Bathroom,’ or ‘Spy Cam.’ On hundreds of occasions during this three-month period, the employee perused female customers’ and employees’ videos, often for an hour or more each day. Undetected by Ring, the employee continued spying for month,” the filing adds.

In August of 2017, a supervisor discovered what the employee was doing only “after the supervisor noticed that the male employee was only viewing videos of ‘pretty girls,'” the complaint alleges. That employee was terminated, the filing says.

Another incident allegedly occurred in 2018, when a male employee allegedly accessed a fellow female employee’s camera “and watched her stored video recordings without her permission,” per the filing.

The FTC alleges that Ring didn’t notify consumers of the broad access to cameras.

The company also “systematically failed” to control two types of cyber attacks and failed to patch system vulnerabilities” before January 2020, the FTC says. Because Ring allegedly did not take appropriate security measures, despite knowing about the problems, “the attacks continued to succeed,” through December of 2019, when media reports were published detailing alarming behavior from attackers, the filing adds.

“During the course of these attacks, approximately 55,000 U.S. customers suffered serious account compromises,” the complaint alleges. “For at least 910 U.S. accounts (affecting approximately 1,250 devices), the bad actor not only accessed the accounts, but took additional invasive actions, such as accessing a stored video, accessing a live stream video, or viewing a customer’s profile. The bad actors disproportionately targeted indoor cameras. Even though indoor cameras are a relatively small subset of Ring’s product offerings, approximately 500 of the 1,250 compromised devices in the U.S. (i.e., approximately 40% of the compromised devices in the U.S.) were Stick Up Cams or Indoor Cams, both of which Defendant markets for indoor use.”

In at least 20 instances, bad actors accessed the Ring accounts device for more than one month, per the complaint.

“And, in many instances, the bad actors were not just passively viewing customers’ sensitive video data,” the complaint says. “Rather, the bad actors took advantage of the camera’s two-way communication functionality to harass, threaten, and insult individuals — including elderly individuals and children — whose rooms were monitored by Ring cameras, and to set off alarms and change important device settings.”

Some of the alleged harassment and slurs included hackers cursing at women in bed, children being the object of hackers’ racist slurs and numerous death threats from hackers to Ring consumers, the FTC says.

Amazon, Ring’s parent company, said the doorbell company “promptly addressed the issues at hand.”

“Ring promptly addressed the issues at hand on its own years ago, well before the FTC began its inquiry,” an Amazon spokesperson told ABC News. “Our focus has been and remains on delivering products and features our customers love, while upholding our commitment to protect their privacy and security.”

Under the proposed FTC order, Ring will be prohibited from profiting from unlawfully accessing consumers videos and directed to pay $5.8 million in consumer refunds, according to court documents.

Ring, founded in 2013 as Doorbot, was sold to Amazon for $1 billion in 2018.

Copyright © 2023, ABC Audio. All rights reserved.

Nearly 2,000 Amazon workers to walk out after return to office

Nearly 2,000 Amazon workers to walk out after return to office
Nearly 2,000 Amazon workers to walk out after return to office
NurPhoto via Getty Images, FILE

(NEW YORK) — Nearly 2,000 Amazon workers plan to walk out on Wednesday as the company weathers layoffs and a mandate that corporate employees return to the office.

“Employees need a say in decisions that affect our lives,” said a petition from worker groups Amazon Employees for Climate Justice and Amazon’s Remote Advocacy.

The employee activism follows a series of layoffs in recent months. In early January, Amazon announced plans to eliminate just over 18,000 roles, including impending layoffs announced in November. In all, the company has slashed 27,000 jobs since last fall.

At the outset of this month the company mandated corporate employees return to the office at least three days per week.

The employee petition cited the return-to-work policy and Amazon’s ongoing climate impact as evidence that company leadership is “taking us in the wrong direction.”

As of Wednesday afternoon, the petition had been signed by 1,922 Amazon employees, including 913 in Seattle, Amazon Employees for Climate Justice and Amazon’s Remote Advocacy said. The company employs more than 1.5 million people worldwide, according to an annual report released last week.

In a statement to ABC News, Amazon spokesperson Brad Glasser said the company stands by its decision to bring corporate employees back to the office.

“We’re always listening and will continue to do so, but we’re happy with how the first month of having more people back in the office has been. There’s more energy, collaboration, and connections happening, and we’ve heard this from lots of employees and the businesses that surround our offices,” Glasser said.

“We understand that it’s going to take time to adjust back to being in the office more and there are a lot of teams at the company working hard to make this transition as smooth as possible for employees,” he added.

As for employees’ concerns over the company’s climate impact, Glasser said: “We continue to push hard on getting to net carbon zero by 2040, and we have over 400 companies who’ve joined us in our Climate Pledge. While we all would like to get there tomorrow, for companies like ours who consume a lot of power, and have very substantial transportation, packaging, and physical building assets, it’ll take time to accomplish.”

Sales at top tech firms have retreated from the blistering pace attained during the pandemic, when billions across the world were forced into isolation.

Customers stuck at home came to rely on delivery services like e-commerce and virtual connections formed through social media and videoconferencing.

Many tech stocks have surged in recent months, however, due in part to optimism about the potential benefits of artificial intelligence.

Shares of Amazon have climbed almost 30% since March 1.

The walkout among Amazon employees, which appears to be made up predominantly of corporate workers, comes more than a year after warehouse workers at a Staten Island facility established the company’s first-ever union in the U.S.

Warehouse workers, however, have faced difficulty sustaining the momentum. In the months following the victory, labor campaigns were defeated overwhelmingly in elections at two other Amazon warehouses in New York.

Meanwhile, sharp divisions emerged within the Amazon Labor Union, the worker-led union behind the victory, according to previous interviews with four current and former workers at the Staten Island facility.

The walkout petition on Wednesday called for policy changes that would improve conditions for employees throughout the company.

“Our goal is to change Amazon’s cost/benefit analysis on making harmful, unilateral decisions that are having an outsized impact on people of color, women, LGBTQ people, people with disabilities, and other vulnerable people,” the petition said.

Calling on employees to sign on to the walkout, the petition added: “The more pledges, the stronger our voice.”

Copyright © 2023, ABC Audio. All rights reserved.

AI poses threat of ‘extinction event for humanity,’ US official says

AI poses threat of ‘extinction event for humanity,’ US official says
AI poses threat of ‘extinction event for humanity,’ US official says
Yuichiro Chino/Getty Images

(NEW YORK) — A top U.S. official for cybersecurity said Wednesday that humanity could be at risk of an “extinction event” if tech companies fail to self-regulate and work with the government to reign in the power of artificial intelligence.

The remarks came a day after hundreds of tech leaders and public figures backed a similar statement that compared the existential threat of AI to a pandemic or nuclear war.

Among the 350 signatories of the statement were Sam Altman, the chief executive of OpenAI, the company behind the popular conversation bot ChatGPT, and Demis Hassabis, the CEO of Google DeepMind, the tech giant’s AI division.

Responding to questions about the joint statement, Cybersecurity and Infrastructure Security Agency Director Jen Easterly urged the signatories to self-regulate and work with the government.

“I would ask these 350 people and the makers of AI — while we’re trying to put a regulatory framework in place — think about self-regulation, think about what you can do to slow this down so we don’t cause an extinction event for humanity,” Easterly said.

“If you actually think that these capabilities can lead to [the] extinction of humanity, well, let’s come together and do something about it,” Easterly added.

Industry leaders on Tuesday sounded a sobering alarm. “Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war,” said the one-sentence statement released by the San Francisco-based nonprofit Center for AI Safety.

Supporters of the statement also featured a range of public figures like musician Grimes, environmental activist Bill McKibben and neuroscience author Sam Harris.

Altman, a top executive within the AI industry, said in Senate testimony roughly two weeks ago that he supports government regulation as a means of averting the harmful effects of AI.

“If this technology goes wrong, it can go quite wrong,” Altman said.

“We think that regulatory intervention by governments will be critical to mitigate the risks of increasingly powerful models,” he added, suggesting the adoption of licenses or safety requirements necessary for the operation of AI models.

Like other AI-enabled chat bots, ChatGPT can immediately respond to prompts from users on a wide range of subjects, generating an essay on Shakespeare or a set of travel tips for a given destination.

Microsoft launched a version of its Bing search engine in March that offers responses delivered by GPT-4, the latest model of ChatGPT. Rival search company Google in February announced an AI model called Bard.

The rise of vast quantities of AI-generated content has raised fears over the potential spread of misinformation, hate speech and manipulative responses.

During comments on Wednesday, Easterly described Chinese-backed hackers and artificial intelligence as “the defining challenges of our time.”

Easterly walked a familiar fine line between touting the possibilities of AI and warning against its harms.

“At the end of the day, these capabilities will do amazing things. They’ll make our lives easier and better,” she said. “They’ll make lives easier and better for our adversaries who will flood the space with disinformation who will be able to create cyber-attacks and all kinds of weapons.”

Copyright © 2023, ABC Audio. All rights reserved.

Airline begins asking passengers to weigh in before flights for new study

Airline begins asking passengers to weigh in before flights for new study
Airline begins asking passengers to weigh in before flights for new study
Greg Bajor/Getty Images

(LONDON) — An airline is asking passengers to weigh in before flights in a survey that will take place for nearly five weeks and involve more than 10,000 passengers.

Air New Zealand will be asking over 10,000 of its customers traveling internationally on their flights between May 29 and July 2 to weigh in before they travel on the airline.

“The survey is essential to the safe and efficient operation of the aircraft and is a Civil Aviation Authority requirement,” according to a statement from Air New Zealand announcing the survey.

“We weigh everything that goes on the aircraft from the cargo to the meals onboard, to the luggage in the hold,” Air New Zealand Load Control Improvement Specialist Alastair James explained. “For customers, crew and cabin bags, we use average weights, which we get from doing this survey.”

This isn’t the first time the airline has done a similar survey.

“Customers on Air New Zealand’s domestic network were weighed in 2021. Now that international travel is back up and running, it’s time for international flyers to weigh in,” the airline said in their statement.

But there is one big caveat that should put the thousands of customers who are asked to weigh in at ease.

“We know stepping on the scales can be daunting. We want to reassure our customers there is no visible display anywhere. No one can see your weight — not even us! It’s completely anonymous,” said James. “It’s simple, it’s voluntary, and by weighing in, you’ll be helping us to fly you safely and efficiently, every time.”

The planned survey will be taking place at the entrance to the gate lounge of certain Air New Zealand flights departing from Auckland International Airport beginning this past Monday.

Copyright © 2023, ABC Audio. All rights reserved.

AI leaders warn the technology poses ‘risk of extinction’ like pandemics and nuclear war

AI leaders warn the technology poses ‘risk of extinction’ like pandemics and nuclear war
AI leaders warn the technology poses ‘risk of extinction’ like pandemics and nuclear war
Carol Yepes/Getty Images

(NEW YORK) — Hundreds of business leaders and public figures sounded a sobering alarm on Tuesday over what they described as the threat of mass extinction posed by artificial intelligence.

Among the 350 signatories of the public statement are Sam Altman, the chief executive of OpenAI, the company behind the popular conversation bot ChatGPT; and Demis Hassabis, the CEO of Google DeepMind, the tech giant’s AI division.

“Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war,” said the one-sentence statement released by the San Francisco-based nonprofit Center for AI Safety.

Supporters of the statement also feature a range of figures like musician Grimes, environmental activist Bill McKibben and neuroscience author Sam Harris.

Concern about the risks posed by AI and calls for forceful regulation of the technology have drawn greater attention in recent months in response to major breakthroughs like ChatGPT.

In testimony before the Senate two weeks ago, Altman warned lawmakers: “If this technology goes wrong, it can go quite wrong.”

“We think that regulatory intervention by governments will be critical to mitigate the risks of increasingly powerful models,” he added, suggesting the adoption of licenses or safety requirements necessary for the operation of AI models.

Like other AI-enabled chat bots, ChatGPT can immediately respond to prompts from users on a wide range of subjects, generating an essay on Shakespeare or a set of travel tips for a given destination.

Microsoft launched a version of its Bing search engine in March that offers responses delivered by GPT-4, the latest model of ChatGPT. Rival search company Google in February announced an AI model called Bard.

The rise of vast quantities of AI-generated content has raised fears over the potential spread of misinformation, hate speech and manipulative responses.

Hundreds of tech leaders, including billionaire entrepreneur Elon Musk and Apple co-founder Steve Wozniak, signed an open letter in March calling for a six-month pause in the development of AI systems and a major expansion of government oversight.

“AI systems with human-competitive intelligence can pose profound risks to society and humanity,” the letter said.

In comments last month to Fox News host Tucker Carlson, Musk raised further alarm: “There’s certainly a path to AI dystopia, which is to train AI to be deceptive.”

The statement released on Tuesday included other major backers from the AI industry, including Microsoft Chief Technology Officer Kevin Scott and OpenAI Head of Policy Research Miles Brundage.

Addressing the brevity of the 22-word statement released on Tuesday, the Center for AI Safety said on its website: “It can be difficult to voice concerns about some of advanced AI’s most severe risks.”

“The succinct statement below aims to overcome this obstacle and open up discussion,” the Center for AI Safety added.

Copyright © 2023, ABC Audio. All rights reserved.

Experts warn against canceling Pride campaigns after extremists threaten Target

Experts warn against canceling Pride campaigns after extremists threaten Target
Experts warn against canceling Pride campaigns after extremists threaten Target
Jorge Villalba/Getty Images

(NEW YORK) — Target reported that its employees faced threats over its new Pride collections celebrating the LGBTQ+ community and responded by pulling some of the merchandise that had caused the most “significant confrontational behavior” to protect the safety and well-being of its employees, according to a statement from the company.

Extremism experts and LGBTQ advocates warned that removing merchandise could be seen as a success by anti-LGBTQ extremists and violent protesters which could lead to copycat behavior threatening the already marginalized community.

Several Targets also received bomb threats over Memorial Day weekend related to the controversy, according to Cleveland 19 News. The threats reportedly called for the return of LGBTQ+ items to the shelves, according to the local news outlet, which said it received the bomb threats.

“I think this will embolden alt-right actors, who now are going to believe that with social media campaigns and targeted actions against retailers that they can proceed in limiting visibility of LGBTQ people,” said Sophie Bjork-James, a professor at Vanderbilt University, who researches the white nationalist movement, in an interview.

The rise coincides with political rhetoric targeting and demonizing the LGBTQ+ community, as well as legislative efforts targeting LGBTQ+ rights to gender-affirming care and inclusion in education.

Drag shows and drag story hours, even children’s hospitals, as well as other LGBTQ+ pride events have faced death and bomb threats as well as protesters in recent years. In November, a Colorado LGBTQ+ bar was the site of a mass shooting, stoking heightened fear within the community.

“Target’s giving into this,” said Victor Asal, a professor at Albany and extremism researcher. “Other extremists will say ‘hey, that’s a great idea. We should do that.'”

Michael Edison Hayden, a senior investigative reporter at the Southern Poverty Law Center, believes extremists are making calculated efforts to redefine LGBTQ+ Pride as a “toxic” or dangerous thing.

Bomb threats, he said, are intended to scare the community and supporters into silence.

“It’s a real concern,” said Hayden. “Bigots feel emboldened largely because of mainstream politicians giving them a pat on the back,” referring to some conservative political and media figures who have recently resurfaced harmful stereotypes against LGBTQ+ people.

The Department of Homeland Security said that intensifying waves of threats and calls of violence against the LGBTQIA+ community could lead to a rise of potential attacks against larger targets, such as public spaces and healthcare sites that may be linked to the community.

According to a report by The Institute for Strategic Dialogue, anonymous forum websites detailing hate crime fantasies or plans against the LGBTQ+ highlight the growing threat of violence against this community.

National LGBTQ+ organizations, including Family Equality, GLAAD, GLSEN, The Human Rights Campaign, and more are calling on Target and all businesses to stand up against anti-LGBTQ+ extremism.

“When values of diversity, equity and inclusion are tested, business must defend them unequivocally,” the organizations said in a joint statement.

Target has been a long-time supporter of the LGBTQ+ community in its merchandising, hosting Pride campaigns annually.

“Since introducing this year’s collection, we’ve experienced threats impacting our team members’ sense of safety and wellbeing while at work,” Target said in a statement. “Given these volatile circumstances, we are making adjustments to our plans, including removing items that have been at the center of the most significant confrontational behavior.”

Target re-affirmed its commitment to the queer community in a statement following the controversy.

“Our focus now is on moving forward with our continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year,” Target said.

Organizations are pointing to the actions of North Face, an outdoor sporting gear company, as an example of how to respond to boycott calls against Pride campaigns. The company defended its ads featuring a drag queen in the face of criticism in a statement and has continued to roll out its Summer of Pride campaign.

“The North Face has always believed the outdoors should be a welcoming, equitable and safe place for all. We are honored and grateful to support partners like Pattie Gonia who help make this vision a reality,” the brand said in a statement to ABC News. “The Summer of Pride series, now in its second year, has helped foster a more accessible and welcoming environment for individuals from all backgrounds to gather and experience the joy of the outdoors.”

Representatives for Target and the National Retail Federation did not immediately respond to ABC News’ requests for comment.

“If you are going to take these steps to embrace the LGBTQ+ population in a public way, you have to have the courage of your convictions to see it through,” said Hayden in an interview with ABC News. “Once you make that decision to do that, and you back away in fear, it is those people you are putting at risk, who are frequently a target of harassment, intimidation – as we’ve seen also, catastrophic violence.”

Copyright © 2023, ABC Audio. All rights reserved.

Theranos founder Elizabeth Holmes reports to prison for defrauding investors

Theranos founder Elizabeth Holmes reports to prison for defrauding investors
Theranos founder Elizabeth Holmes reports to prison for defrauding investors
WIN-Initiative/Neleman/Getty Images

(BRYAN, Texas) — Disgraced Theranos founder Elizabeth Holmes reported to a Texas prison on Tuesday to begin a more than 11-year sentence for defrauding investors with false claims about her company’s blood-testing technology.

Holmes arrived at the prison in Bryan, Texas, at about 12:30 p.m. central time wearing a tan cardigan and jeans. She was accompanied by her parents and husband, Billy Evans.

Since she was sentenced last fall, Holmes has failed in multiple requests to delay her incarceration as she awaits a ruling on an appeal.

The watershed moment on Tuesday follows a legal saga that turned the former billionaire entrepreneur, who swore her startup could run hundreds of tests on a single drop of blood, into a symbol of excess and deception in Silicon Valley.

A federal judge earlier this month ordered Holmes to report to prison after the U.S. Court of Appeals for the Ninth Circuit denied her request to remain free pending an appeal.

Judge Edward Davila, who oversaw the trial of Holmes, allowed her a short postponement of the start of her sentence to May 30 as she made final arrangements, including child care for her two young children.

Holmes will report to Federal Prison Camp in Bryan, Texas. The minimum security facility houses other white collar criminals, including reality TV star Jen Shah, from the cast of “The Real Housewives of Salt Lake City.”

Ramesh “Sunny” Balwani, the former romantic partner of Holmes and president of the now defunct blood testing company, began his nearly 13-year sentence at a prison in San Pedro, California, last month. Balwani, who was second in command to Holmes at Theranos, was convicted of fraud and conspiracy in December.

In denying a previous attempt to delay Holmes’ prison sentence, Davila said she had failed to raise a “‘substantial question of law or fact’ that is ‘likely to result in a reversal or an order for a new trial on all counts.'”

Earlier this month, Holmes and Balwani were ordered to pay $452 million in restitution to those who suffered damage from the company’s fraud.

Davila called on them to pay $125 million of that sum to media titan Rupert Murdoch, an investor in Theranos. Other victims in the case included the family of former Secretary of Education Betsy DeVos, and the Walton family, the founders of Walmart. Walgreens and Safeway, which had also struck multimillion dollar deals with Holmes to employ Theranos’ technology, were also included in a set of entities designated as victims deserving of restitution.

In November, Holmes was sentenced to 135 months, or 11 1/4 years, in prison.

Holmes was convicted in January on four counts of investor fraud and conspiracy while at the helm of Theranos.

The verdict followed a four-month trial that detailed Holmes’ trajectory from a Stanford University dropout in 2003 to a star business leader on the cover of Fortune magazine little more than a decade later.

But in October 2015, a bombshell Wall Street Journal report came out, detailing the turmoil within Theranos. As Holmes and her company were hit with official scrutiny, her fortune quickly dwindled. Less than a year later, Forbes downgraded its assessment of Holmes’ net worth from $4.5 billion to $0.

Facing charges of massive fraud from the Securities and Exchange Commission, Holmes agreed to forfeit control of Theranos in 2018.

ABC News’ Luke Barr, Gina Sunseri and Miles Cohen contributed to this report.
Related Topics

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Theranos founder Elizabeth Holmes set to report to prison for defrauding investors

Theranos founder Elizabeth Holmes reports to prison for defrauding investors
Theranos founder Elizabeth Holmes reports to prison for defrauding investors
WIN-Initiative/Neleman/Getty Images

(NEW YORK) — Disgraced Theranos founder Elizabeth Holmes will report to prison on Tuesday to begin a more than 11-year sentence for defrauding investors with false claims about her company’s blood-testing technology.

Holmes, who was sentenced last fall, has failed in multiple requests to delay her incarceration as she awaits a ruling on an appeal.

The watershed moment on Tuesday follows a legal saga that turned the former billionaire entrepreneur, who swore her startup could run hundreds of tests on a single drop of blood, into a symbol of excess and deception in Silicon Valley.

A federal judge earlier this month ordered Holmes to report to prison after the U.S. Court of Appeals for the Ninth Circuit denied her request to remain free pending an appeal.

Judge Edward Davila, who oversaw the trial of Holmes, allowed her a short postponement of the start of her sentence to May 30 as she made final arrangements, including child care for her two young children.

Holmes will report to Federal Prison Camp in Bryan, Texas. The minimum security facility houses other white collar criminals, including reality TV star Jen Shah, from the cast of The Real Housewives of Salt Lake City.

Ramesh “Sunny” Balwani, the former romantic partner of Holmes and president of the now defunct blood testing company, began his nearly 13-year sentence at a prison in San Pedro, California, last month. Balwani, who was second in command to Holmes at Theranos, was convicted of fraud and conspiracy in December.

In denying a previous attempt to delay Holmes’ prison sentence, Davila said she had failed to raise a “‘substantial question of law or fact’ that is ‘likely to result in a reversal or an order for a new trial on all counts.'”

Earlier this month, Holmes and Balwani were ordered to pay $452 million in restitution to those who suffered damage from the company’s fraud.

Davila called on them to pay $125 million of that sum to media titan Rupert Murdoch, an investor in Theranos. Other victims in the case included the family of former Secretary of Education Betsy DeVos, and the Walton family, the founders of Walmart. Walgreens and Safeway, which had also struck multi-million dollar deals with Holmes to employ Theranos’ technology, were also included in a set of entities designated as victims deserving of restitution.

In November, Holmes was sentenced to 135 months, or 11 1/4 years, in prison.

Holmes was convicted in January on four counts of investor fraud and conspiracy while at the helm of Theranos.

The verdict followed a four-month trial that detailed Holmes’ trajectory from a Stanford University dropout in 2003 to a star business leader on the cover of Fortune magazine a little more than a decade later.

But in October 2015, a bombshell Wall Street Journal report came out, detailing the turmoil within Theranos. As Holmes and her company were hit with official scrutiny, her fortune quickly dwindled. Less than a year later, Forbes downgraded its assessment of Holmes’ net worth from $4.5 billion to $0.

Facing charges of massive fraud from the Securities and Exchange Commission, Holmes agreed to forfeit control of Theranos in 2018.

Copyright © 2023, ABC Audio. All rights reserved.

Memorial Day sales: Shop the best deals

Memorial Day sales: Shop the best deals
Memorial Day sales: Shop the best deals
discan/Getty Images

(NEW YORK) — Memorial Day is here and that means there are plenty of deals and sales to shop across multiple retailers.

ABC News’ Becky Worley appeared on Good Morning America Monday to discuss the best deals consumers can find for the holiday:

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