(NEW YORK) -- When Michael Arney, the founder of an eight-person marketing design agency in Minneapolis, Minnesota, learned an employee was leaving for a 50% raise at a larger company, he knew he had to make a change or it would happen again.

"I just couldn't compete with the monetary offer," said Arney, recounting the moment in January 2022 when he first considered a four-day, 32-hour workweek for his company Halftone Digital.

Within two months, the shorter hours took effect without a reduction in pay.

"I thought it was a pretty sweet deal," Arney told ABC News. "Nobody has left since."

Halftone Digital is among a growing roster of companies that use a four-day workweek, fueling a movement that has accelerated amid a pandemic-era reconsideration of the workplace, experts told ABC News.

However, the four-day workweek faces formidable obstacles to nationwide adoption, they added.

Here's what to know about the rise of the four-day workweek, how it works and its prospects for implementation across the U.S.:

Where has a four-day workweek taken effect?

A host of countries and U.S. states have moved toward a four-day workweek or considered doing so, Juliet Schor, an economist in the Boston College Sociology Department who studies the issue, told ABC News.

Spain, Iceland and South Africa are among the nations that have implemented a trial of the four-day workweek for select companies and workers.

A six-month experiment in the United Kingdom, which involved 61 companies and about 2,900 workers, resulted in a continuation of the policy for 56 businesses or 92% of the employers, according to a February report from advocacy group 4 Day Week Global.

Belgium imposed a law in November that requires employers to offer full-time workers a right to request a four-day workweek.

"We're seeing more countries take steps," Schor said.

At the state level, lawmakers in Massachusetts introduced a bill in April that would provide employers with a tax credit if they shift at least 15 workers to four days a week without cutting their pay. In January, legislators in Maryland introduced a similar bill before rescinding it months later.

In California and the U.S. House, lawmakers have introduced bills that would set the standard workweek at 32 hours.

Is a four-day workweek still 40 hours?

A crucial question at the heart of the debate over a four-day workweek is whether the policy constitutes a decrease in hours or a traditional 40-hour week compressed to fewer days.

Companies have opted for both approaches, setting a loose definition for a four-day workweek that accommodates a willingness to reduce the hours in the workweek or preserve them, experts told ABC News.

"There are different places doing it different ways," Mark Bolino, a professor of organizational behavior at the University of Oklahoma, told ABC News. "I don't think there's consistency."

Tuan Diep, a senior product designer at Halftone Digital who works 32 hours each week, said a workweek consisting of four 10-hour days would make for a markedly different experience.

"Although two hours a day doesn't seem like a lot, I just feel like any extra time that we're required to work is going to create more stress," he told ABC News. "I'm not really for 10-hour workdays."

Will the U.S. ever have a four-day workweek?

Some experts said a combination of escalating market pressure and legislative activity could ultimately bring a nationwide four-day workweek standard; while others said such an outcome would prove nearly impossible, at least anytime soon.

Eric Loomis, professor and labor historian at the University of Rhode Island, said the policy has faced difficulty spreading from white collar professions to low-wage ones.

"I can see in an office getting a job done in 32 hours instead of 40 hours," Loomis told ABC News. "If you're a ticket taker at a theater or you're wearing a costume at Disney World, you need to be there."

The prospect of federal legislation enshrining a four-day workweek standard, meanwhile, is highly unlikely, Loomis added.

"The U.S. hasn't passed significant pro-labor legislation that's in any way comprehensive in almost 90 years," he said.

Schor disagreed, however, citing the recent rise of businesses voluntarily adopting the four-day workweek.

"I see momentum in the market as more companies do it," Schor said. "That creates more pressure for the government to act."

The U.S. could take incremental steps downward from 40-hour week to a 32-hour week within the next decade, Schor added, predicting that policies would start in statehouses and work their way to the federal level.

"I think that's conceivable. People really, really want it," Schor said. "Am I going to put money on it? No."

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(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."

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(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.

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(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."

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(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."

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(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.

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(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.

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(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."

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(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.
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(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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(LOS ANGELES) -- One of the largest insurance agencies in the country will no longer accept applications for home and business insurance in California due to wildfire risks and the cost of rebuilding.

State Farm has ceased new applications, including all business and personal lines property and casualty insurance, starting Saturday, the company announced in a press release.

Existing customers will not be affected, and the company will continue to offer auto insurance in the state, according to the release.

The insurance agency cited "historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market" for its decision.

State Farm said while it takes its responsibility to manage risk "seriously" and will continue to work with state policymakers and the California Department of Insurance to help build market capacity in California, the decision was necessary to ensure the company remains in good financial standing.

"It's necessary to take these actions now to improve the company's financial strength," the statement read. "We will continue to evaluate our approach based on changing market conditions. State Farm® independent contractor agents licensed and authorized in California will continue to serve existing customers for these products and new customers for products not impacted by this decision."

A decadeslong megadrought and climate change have been exacerbating wildfire risk in California in recent years. Severe drought during the winter is leading to matchbox conditions in the dry season, allowing intense wildfires to ignite with the slightest spark.

The warm, dry climate that serves as fuel for wildfires is typical for much of the West, but hotter overall temperatures on Earth are increasing wildfire risk in the region.

Last year, the Mosquito Fire destroyed dozens of homes in El Dorado and Placer counties. In 2021, the Dixie Fire destroyed more than 100 homes in the town of Greenville.

The Creek Fire in 2020 became the largest single fire in California history, damaging or destroying nearly 1,000 structures and burning through about 380,000 acres.

Rebuilding from wildfire destruction is expensive, expensive, experts have found.

The reconstruction costs from the 2022 Coastal Fire in Southern California were estimated to be $530 million, and only 20 homes were destroyed, according to a report by property solutions firm CoreLogic.

In addition, the nationwide impact of California's 2018 wildfire season -- which included the Camp Fire, the most destructive in California history -- totaled $148.5 billion in economic damage, according to a study by the University College London.

The state's FAIR Plan provides basic fire insurance coverage for high-risk properties when traditional insurance companies will not, but that plan is the last resort, Janet Ruiz, director of strategic communication for the Insurance Information Institute, told ABC San Francisco station KGO.

"It's a basic policy, only covers fire - you have to get a wraparound policy too to cover theft and liability," she said.

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(NEW YORK) -- German automaker Mercedes-Benz has seen its share of the U.S. luxury market slip as customers traded in their V8 sedans and sport utility vehicles for Teslas. Now, the company is following in Tesla's footsteps by building out its own charging network, accelerating its electrified fleet and adding Level 3 autonomous driving technology to its vehicles.

Mercedes' goal is simple: Become the "most desirable electric vehicle luxury brand," according to Dimitris Psillakis, president and CEO of Mercedes-Benz North America.

Psillakis is helping oversee the company's aggressive push toward EVs. The first Mercedes EV, the futuristic EQS sedan, debuted in October of 2021. Four more models, including three electric SUVs, promptly followed. The EQS SUV and EQE SUV are built at the company's Tuscaloosa, Alabama, plant. Mercedes' brand-new factory in Bibb County supplies the lithium-ion batteries. Mercedes aims to go fully electric by 2030.

"To be the most desirable electric vehicle luxury brand, we have to strike a balance between good products and good design but also supportive service," Psillakis told ABC News. "We don't see Tesla as a luxury competitor ... we see Tesla as a disruptor in the automotive sector, especially when it comes to electric vehicles."

Mercedes' strategy seems to be working. It sold 7,341 EVs in the first quarter of 2023, an increase of 251% versus the prior year. Electric vehicles now account for 12% of the company's sales in the U.S., the company said.

"Luxury buyers are more interested in EVs. They have higher disposable income and are tech orientated," Jessica Caldwell, executive director of insights at Edmunds, told ABC News. "Tesla redefined what it means to be luxury ... but its market share is now decreasing. Tesla peaked in 2019 when it controlled 80% of the market."

EVs now make up 6% of the U.S. automotive market. Range anxiety and public charging availability are still top reasons drivers are not switching to electrics, Caldwell said.

"Charging is still a big roadblock for customers," she said. "Mercedes' charging stations are a reassurance to customers and a good, though expensive, marketing strategy."

The company's charging network, which launches first in the U.S. and Canada and will be open to non-Mercedes models, could solve the country's EV charging dilemma.

"The logic behind it is better service, convenience and taking away some worries customers have today on electric vehicles," Psillakis said. "We care about the product ... it's our responsibility to offer the best convenience to our customers."

Tony Quiroga, editor-in-chief of Car and Driver, said Tesla's highly dependable supercharger network and extended-range models earned it a dedicated fan base. Premium brands like Mercedes are still struggling to overtake the ubiquitous Tesla Model 3 and Model Y, he argued, though Mercedes may be closing the gap. Tesla's aging fleet could also convince consumers to look elsewhere, he argued.

"Mercedes doesn't want to take a backseat to Tesla," he told ABC News. "A charging network can be a big win for Mercedes."

Quiroga pointed out that two Mercedes EVs -- the EQ S450+ and EQ S580 -- beat their EPA range estimates when Car and Driver staff conducted their extensive 75 mph tests on the vehicles.

"It's very rare when a car beats its EPA numbers," he said.

And Mercedes' EV momentum will give it an edge over the competition, according to Robby Degraff, an analyst at AutoPacific.

"They’ve really hit all the right segments so far, from the larger EQS SUV to the EQE sedan," he told ABC News. "If a loyal S-Class owner wants to go all-in on electrification, there should absolutely be a comparable EV, like the EQS sedan. That’s an approach and strategy I think Mercedes-Benz has really nailed down."

Mercedes recently revealed the Mercedes-Maybach EQS 680 SUV, the first EV from the uber exclusive marque. The full-size SUV utilizes technology from the EQS SUV and is fitted with sustainably processed leather. Many of the vehicle's parts and components are made from resource-saving materials, including secondary steel and recycled aluminum.

EVs, however, are expensive and Psillakis said Mercedes is not immune to rising interest rates and economic uncertainty.

"Obviously it's affecting us, but we have a wide range of products in terms of style prices," he said. "There is high demand for the new GLC. This vehicle is not affected at the moment by any high interest rates or inflation."

EVs are one part of Mercedes' long game; the company scored a "monumental achievement" when Nevada regulators certified its autonomous driving for public roads earlier this year. "Drive Pilot" will be included for model year 2024 S-Class and EQS models and is the only SEA Level 3 automated driving system approved by lawmakers, according to Mercedes. Psillakis said California may be the next state to approve the system, which operates at speeds up to 40 mph and is more technologically advanced than Tesla's Autopilot feature.

"We have to make sure the expectation to customers is the right one and make sure the system is delivering," Psillakis said.

The attention on EVs has not stopped Mercedes from perfecting its gas-powered SUVs and high-performance AMG models. Last month Mercedes revealed an updated E-Class midsize sedan and introduced the plug-in hybrid GLE 450e 4MATIC SUV. A new 2024 GLS model range will arrive in U.S. dealerships later this year.

"Mercedes is operating two companies at the same time," said Caldwell. "Mercedes has an expansive EV lineup but the internal combustion vehicles are paying the bills. It's expensive to run these two companies in parallel."

Degraff said Mercedes' internal combustion vehicles are still highly desirable and sought after by enthusiasts.

"Mercedes-Benz has been able to crank out seriously eye-watering performance just by tapping into mild hybridization and plug-in hybrids," he said.

Psillakis dismissed concerns that the company's fabled AMG division would lose its cachet in an EV world.

"EQS is electric and it is an AMG," he said. "Yes, I do miss the sounds of a V8 engine. Do I miss the fun? The torque? The performance? No. AMG is not only sounds and horsepower. It's also exclusivity, design and performance, which you can get in electric vehicles too."

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(NEW YORK) -- The threat to Social Security payments posed by a debt ceiling impasse keeps Linda Stanberry, 76, dwelling on her worst fear: the loss of the home she has lived in for 48 years.

Stanberry, who depends entirely on about $1,800 she receives in federal benefits each month, said she hardly saves anything after expenses like food, utilities, prescription drugs and supplemental insurance for cancer coverage.

The federal government could fail to pay some of its bills as soon as June 1, Treasury Secretary Janet Yellen warned this week. If that shortfall interrupts Social Security, Stanberry would need emergency cash, she said.

"I would have nothing," Stanberry, who lives in Southwest Virginia, told ABC News. "There's no way I could keep my home."

Stanberry is one of millions of low-income older Americans who rely on Social Security for almost the entirety of their funds. In all, roughly 1 in 7 Americans age 65 or older depend on the federal benefits for 90% or more of their income, Social Security Administration data shows.

If the U.S. fails to make Social Security payments next month, or even delays payments for a few days, low-income older people would face dire circumstances, foregoing basic necessities like food and medical care, experts and advocates told ABC News.

"For older adults living paycheck to paycheck, this debt ceiling process has been absolutely terrifying," Ramsey Alwin, the president and CEO of nonprofit National Council on Aging, told ABC News. "Losing that check means they wouldn't be able to put food on the table."

A failure to make Social Security payments would hit some older Americans by next week.

The federal government is scheduled to make payments on June 1 to enrollees in a supplemental social security program for low-income older people with disabilities. The following day, a batch of Social Security payments totaling $25 billion is scheduled to go out to general recipients, targeting the most vulnerable such as older enrollees.

Additional payments are scheduled to go out on June 14, June 21 and June 28, each of which amounts to about $25 billion.

"This could be absolutely disastrous," Peter Kempner, the legal director at New York City-based Peter Kempner Volunteers of Legal Service, who works closely with older adults in poverty, told ABC News.

Many low-income older people lack savings, leaving them especially vulnerable to a financial shock, he added.

"They live government paycheck to government paycheck," Kempner said. "They don't have reserves to float themselves for a couple months in case benefits are suspended because of what's going on in Washington."

As a debt default nears, House Speaker Kevin McCarthy told reporters on Friday that he remained confident that negotiators would soon strike a deal.

Negotiators "made progress" overnight, McCarthy said, declining to offer specifics of the potential agreement.

McCarthy is commiting to provide House members 72 hours to review the bill before bringing it to the floor for a vote, leaving little time for a deal to be ratified before a potential cash shortfall on June 1.

Even a delay in Social Security payments of a few days could put low-income older people in an agonizing position of prioritizing their little remaining spending between rent, food and transportation to medical appointments, experts and advocates told ABC News.

"Every single day that goes by makes a difference," Cindy Cox-Roman, the president and CEO of advocacy group HelpAge USA, told ABC News.

Charles Turner, 74, relies solely on some $1,000 in Social Security that he receives each month, he said.

Since he suffers from a disability that limits his mobility and use of public transportation, Turner depends on rideshare services that cost as much as $25 each way to get to weekly doctor's appointments and Tai Chi classes at a senior center, he said.

"It would be a challenge to just even go shopping for food and get to physical therapy appointments," said Turner, who lives in Washington D.C.

Policymakers engaged in debt ceiling negotiations, he added, overlook these direct consequences for older people.

"They don't see us," Turner said. "We're just lost in the lurch."

ABC News' Katherine Faulders, Gabe Ferris, Allison Pecorin and Alexandra Hutzler contributed reporting.

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(NEW YORK) -- With Memorial Day weekend travel underway, U.S. airports recorded the highest number of passengers on Thursday since before the COVID-19 pandemic began.

The Transportation Security Administration said it screened 2,658,057 people at checkpoints across the country on Thursday, the highest daily number since 2019.

Even more passengers could be screened on Friday.

According to AAA, airports could see the busiest Memorial Day weekend since 2005.

Nearly 3.4 million people are expected to take to the skies over the holiday, up 11% from 2022 and 5.4% from 2019, according to AAA.

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(NEW YORK) -- Ahead of the slate of blockbuster films hitting theaters this summer, MoviePass is back with a new plan that could help moviegoers save money at the box office.

"We're really excited to be able to let everybody in," MoviePass CEO Stacy Spikes told Good Morning America.

The company that lets you see any movie at any theater is back with three new subscription options.

Subscribers can choose from three different tiers: basic, standard or premium, depending on their viewing habits, which range in price from $10 a month to $30 a month.

"Each month, you're going to get a certain amount of credits," Spikes explained. "You [can] go to matinees or things where you can use fewer credits and then if you say 'I really want go Friday or Saturday night,' you're going to use more credits there. And each month, they replenish and if there's a month you don't go to the movies, your credits just roll over."

Spikes and his co-founder sold a majority stake in the company, which was first started in 2011, in 2017, and the subscription price was later changed to a $10-per-month model for unlimited movies. The service was later shut down in 2019, following several unsustainable subscription changes and price decreases.

"It went bankrupt as we properly figured it would, and then last year I bought it back," Spikes said. "We've gotten the experience really down tight. And we're already seeing lots of people that are already on the platform. The beautiful thing is you can cancel anytime. There is no contract. You are not locked into a single theater."

This summer, 42 theatrical releases are expected and Spikes said he's seen a renewed energy from Hollywood.

"We've seen more studios commit to the overall production of theatrical releases and I think we are seeing a new golden age of cinema," he said.

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