Elizabeth Holmes’ former partner faces sentencing in Theranos case
SAN JOSE, Calif. –
A former Theranos govt learns Wednesday whether or not he will probably be punished as severely as his former lover and business associate for peddling the corporate’s bogus blood-testing know-how that duped buyers and endangered sufferers.
The sentencing for Ramesh “Sunny” Balwani, who was convicted in July of fraud and conspiracy, comes lower than three weeks after Elizabeth Holmes, the corporate’s founder and CEO, acquired greater than 11 years in jail for her position within the scheme. The scandal revolved across the firm’s false claims to have developed a medical system that would scan for lots of of ailments and different potential issues with just some drops of blood taken with a finger prick.
The case threw a shiny mild on Silicon Valley’s darkish aspect, exposing how its tradition of hype and boundless ambition may veer into lies.
Holmes, 38, may have gotten as much as 20 years in jail — a penalty that U.S. District Judge Edward Davila may now impose on Balwani, who spent six years as Theranos’ chief working officer whereas remaining romantically concerned with Holmes till a bitter break up in 2016.
While on the witness stand in her trial, Holmes accused Balwani, 57, of manipulating her by means of years of emotional and sexual abuse. Balwani’s lawyer has denied the allegations.
The two trials had considerably totally different outcomes. Unlike Balwani, Holmes was acquitted on a number of costs of defrauding and conspiring in opposition to individuals who paid for Theranos blood assessments that produced deceptive outcomes and will have pointed sufferers towards the fallacious remedy. The jury in Holmes’ trial additionally deadlocked on three costs.
Balwani was convicted on all 12 felony counts, and his attorneys contend he deserves a much more lenient sentence of simply 4 to 10 months in jail, ideally in residence confinement. Prosecutors for the Justice Department are looking for 15 years. A probation report recommends 9 years.
Balwani’s trial was sparsely attended, and on Wednesday nobody was in line an hour earlier than the courthouse opened to attend his sentence. That’s a pointy distinction to the queue that started to type 5 hours earlier than the doorways opened at Holmes’ Nov. 18 sentencing.
Reporters from across the U.S. flocked to Silicon Valley to cowl her trial and needed to compete for seats within the courtroom.
Duncan Levin, a former federal prosecutor who’s now a protection lawyer, described Balwani’s bid for a lightweight sentence as “utterly unrealistic.” Levin suspects the choose might give better weight to the Justice Department and the probation workplace suggestions, which mirror the sentences these companies searched for Holmes.
The choose finally gave her 11 1/4 years in jail and really useful that the sentence be served in a low-security facility in Byran, Texas.
The Justice Department “has now conceded that both defendants deserve the same sentence, even though Balwani was convicted for far more counts,” Levin mentioned. Since Holmes obtained an 11-year sentence, “it follows logically that he will get the same sentence.”
Federal prosecutors additionally need the choose to order Balwani to pay $804 million in restitution to defrauded buyers — the identical quantity sought from Holmes. Davila deferred a call on restitution throughout Holmes’ Nov. 18 sentencing till an unspecified future date.
In courtroom paperwork, Balwani’s attorneys painted him as a hardworking immigrant who moved from India to the U.S. throughout the Nineteen Eighties to change into the primary member of his household to attend faculty. He graduated from the University of Texas in 1990 with a level in info techniques.
He later moved to Silicon Valley, the place he first labored as a pc programmer for Microsoft earlier than founding an internet startup that he bought for hundreds of thousands of {dollars} throughout the dot-com increase of the Nineties.
Balwani and Holmes met across the identical time she dropped out of Stanford University to begin Theranos in 2003. He grew to become enthralled along with her and her quest to revolutionize well being care.
Balwani’s attorneys mentioned he finally invested about $5 million in a stake in Theranos that finally grew to become value about $500 million on paper — a fraction of Holmes’ one-time fortune of of $4.5 billion.
That wealth evaporated after Theranos started to unravel in 2015 amid revelations that its blood-testing know-how by no means labored as Holmes had boasted in glowing journal articles that likened her to Silicon Valley visionaries equivalent to Apple co-founder Steve Jobs.
Before Theranos’ downfall, Holmes teamed up with Balwani to boost almost $1 billion from deep-pocketed buyers that included software program mogul Larry Ellison and media magnate Rupert Murdoch.
“Mr. Balwani is not the same as Elizabeth Holmes,” his attorneys wrote in a memo to the choose. “”He truly invested hundreds of thousands of {dollars} of his personal cash; he by no means sought fame or recognition; and he has an extended historical past of quietly giving to these much less lucky.” Balwani’s lawyers also asserted that Holmes “was dramatically extra culpable” for the Theranos fraud.
Echoing related claims made by Holmes’s attorneys earlier than her sentencing, Balwani’s attorneys additionally argued that he has been adequately punished by the extreme media protection of Theranos, which has been the topic of a e book, documentary and award-winning TV sequence.
Balwani “has lost his career, his reputation and his ability to meaningfully work again,” his attorneys wrote.
Federal prosecutors forged Balwani as a ruthless, power-hungry confederate in crimes that ripped off buyers and imperiled individuals who acquired flawed outcomes. The blood assessments had been to be accessible in a partnership with Walgreen’s that Balwani helped engineer.
“Balwani presented a fake story about Theranos’ technology and financial stability day after day in meeting after meeting,” the prosecutors wrote of their memo to the choose. “Balwani maintained this facade of accomplishments, after making the calculated decision that honesty would destroy Theranos.”
