SAN JOSE, Calif. — A jury on Thursday convicted former Theranos govt Ramesh “Sunny” Balwani of collaborating with disgraced Theranos CEO Elizabeth Holmes in a large fraud involving the blood-testing firm that when enthralled Silicon Valley.
The 12 jurors discovered Balwani responsible on all 12 felony counts of defrauding each Theranos traders and the sufferers who relied on wildly unreliable blood checks that would have jeopardized their well being.
Balwani sat impassively because the verdicts had been learn in a San Jose, California, courtroom, blinking often whereas hardly ever wanting on the seven girls and 5 males who convicted him.
The result places Balwani and Holmes in related conditions. Holmes was convicted on 4 counts of investor fraud and conspiracy earlier this yr. Throughout that trial, Holmes tearfully accused Balwani of sexually and emotionally abusing her whereas the 2 had been romantically concerned. An lawyer for Balwani has vehemently denied these prices.
Each Holmes, 38, and Balwani, 57, resist 20 years in jail.
After the verdicts, U.S. District Decide Edward Davila raised Balwani’s bail from $500,000 to $750,000 and set Nov. 15 as his sentencing date. Holmes, who’s free on $500,000 bail, is scheduled to be sentenced Sept. 26.
The twin convictions characterize a convincing victory for federal prosecutors, who seized on the Theranos case as a uncommon alternative to carry bold entrepreneurs accountable for partaking in technological hyperbole whereas pursuing fame and fortune. Within the course of, they hoped to discourage the apply of constructing daring and unproven guarantees about still-nascent merchandise — a startup technique generally known as “faux it till you make it.”
“We’re gratified by the jury’s laborious work and attentiveness to the proof offered. We admire the decision and sit up for the sentencing proceedings,” U.S. Legal professional Stephanie Hinds stated outdoors the courthouse.
Balwani didn’t reply to requests for remark as he left courtroom along with his authorized staff.
After the verdicts had been learn and the jury was dismissed, Balwani walked over to his two brothers who had been sitting behind him for what seemed to be a solemn dialogue. The three stood quietly, heads bowed.
Whereas Holmes insinuated throughout her trial that Balwani manipulated her into making poor decisions, Balwani’s attorneys explicitly sought to shift all of the blame for any misconduct squarely on Holmes.
As a part of Balwani’s protection, the attorneys identified that Holmes was not solely CEO, but additionally a Silicon Valley star who persuaded traders to pour practically $1 billion into Theranos. Holmes boasted that her firm had discovered a approach to scan for a whole lot of potential illnesses with a tool referred to as the Edison that would check just some drops of blood taken with a finger prick. Such know-how might doubtlessly revolutionize healthcare.
Nevertheless it turned out that the Edison by no means labored correctly, offering defective check outcomes that Theranos carried out as a part of a deal to arrange mini labs in Walgreen’s pharmacies. The issues in Theranos’ vaunted know-how prompted Holmes and Balwani to shift their testing to standard machines made by different distributors and whereas drawing vials of blood from sufferers’ veins — a far cry from Holmes’ guarantees.
After committing about $15 million of his personal cash to bolster Theranos after which changing into the corporate’s chief working officer in 2010, Balwani ultimately oversaw the blood-testing lab that was delivering the incorrect outcomes and supervised the Walgreen’s deal. That essential element might have influenced the jury to convict him of defrauding sufferers whereas one other jury acquitted Holmes on the identical prices.
Balwani additionally ready most of the projections about Theranos’ future income that helped the corporate elevate cash from traders These forecasts proved to be grossly exaggerated.
Not like Holmes, who spent seven days on the witness stand throughout her trial, Balwani didn’t testify in his personal protection. After Holmes’ trial, jurors who had been interviewed by the media stated they discovered her to be likeable if not solely credible.
Balwani’s protection mirrored Holmes’s in a single key side: Each depicted the pair as tireless employees who believed so deeply in Theranos’ know-how that they by no means bought their respective stakes within the Palo Alto, California, firm. At one level in 2014, Holmes’ fortune was estimated at $4.5 billion whereas Balwani’s Theranos holdings had been valued at $500 million.
However every thing started to unravel in late 2015 after a collection of explosive articles in The Wall Road Journal uncovered rampant issues with Theranos’ know-how. By Could 2016, Holmes had dumped Balwani as her enterprise and romantic accomplice. Holmes is now the mom of an toddler son fathered by her present accomplice, Billy Evans, who was by her aspect by means of most of her trial.