Theranos Ex-President Balwani Found Guilty of Fraud

Ramesh “Sunny” Balwani, the former president of Theranos Inc. and ex-boyfriend of its founder Elizabeth Holmes, was found guilty of fraud for his role in the collapse of the $9 billion blood-testing startup.

Six months ago, Holmes was found guilty of fraud and sentenced to six months in prison. Holmes had promised to revolutionize medicine by using just a few drops blood for a variety of tests.

Balwani may spend up to 20 years behind bars for these charges.

The pair were tried on charges of lying to investors and patients about the accuracy and capabilities of Theranos’s machines. The company collapsed due to regulatory crackdowns as well shareholder lawsuits. It was the catalyst for books, documentary, and TV series.

Continue reading: It’s the True Story Behind The DropoutThe Elizabeth Holmes Theranos Scandal

Balwani, according to prosecutors was an important part of the business’s image. Jurors weighing his fate heard some of the same damaging evidence that led to Holmes’s conviction, including emails and texts tying the pair together, both professionally and romantically.

The panel also heard from a laboratory director, regulator and patient who didn’t testify against Holmes. The purpose of this testimony was to underline Holmes’ familiarity regarding the failed blood test results.

Holmes is still awaiting her sentence and she has asked for the dismissal of her conviction by the judge who presided at her trial.

After five days of jury deliberations, Balwani was mostly still, but was occasionally blinking and looking at his lead attorneys.

Balwani was found guilty on all of the allegations against him by the jury, including six counts defrauding investors, two counts conspiring with Holmes and four counts patient fraud. Holmes received mixed verdicts. Jurors found her guilty of six counts of defrauding investors, two counts of conspiring with Holmes and four counts of patient fraud. They were unable to decide on the investor fraud charges.

Balwani denied the government’s charges of conspiracy and fraud. His attorneys argued that prosecutors selectively selected the most damaging blood tests and ignored many other test results from a disfunct Theranos database.

Continue reading: Silicon Valley Investors Haven’t Let the Theranos Scandal Change the Way They Do Business

“Balwani ran the lab for a time and was just as involved as Holmes in management,” said Andrey Spektor, a criminal defense lawyer not involved in the case. “To some extent, the government had a stronger case against him.”

The government’s case against Balwani was also made simpler, Spektor said, because it didn’t have to navigate Holmes’s claims that he sexually and psychologically abused her. Prosecutors “didn’t have to worry about the sympathy theme on which Holmes ended her defense,” he said. Balwani refuted the allegations Holmes made at his trial of abuse.

During a closing argument that lasted more than 12 hours over three days, Balwani’s lawyer claimed that the Silicon Valley businessman was dazzled by Holmes the same way that investors and high-profile board members were.

“There’s no reason why he wouldn’t have seen the exact same thing: the charisma, the drive, the vision, the goal to change diagnostic testing. And he bought into that vision,” attorney Jeffrey Coopersmith told the jury. “He bought into that vision not only with his time but also with his own money,” investing $4.6 million in the company.

John Bostic, Assistant U.S. attorney, warned jurors to not be misled.

“You should not believe that Mr. Balwani’s perspective on Ms. Holmes was an outsider’s perspective,” he said.

The prosecutor said they collaborated on every facet of Theranos’s operations, including walling off key information from some employees in an attempt to maintain the alleged fraud.

Balwani remains in the United States Securities and Exchange Commission’s civil case, alleging that he was involved in securities fraud.

U.S. v. Balwani 18-cr-04258, U.S. District Court Northern District of California San Jose

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