Holmes’ former partner gets nearly 13 years in Theranos case
SAN JOSE, Calif. –
A choose on Wednesday sentenced former Theranos government Ramesh “Sunny” Balwani to just about 13 years in jail for his position within the firm’s blood-testing hoax — a sentence barely longer than that given to the CEO, who was his lover and confederate in one among Silicon Valley’s largest scandals.
Balwani was convicted in July of fraud and conspiracy related to the corporate’s bogus medical expertise that duped traders and endangered sufferers. His sentencing got here lower than three weeks after Elizabeth Holmes, the corporate’s founder and CEO, obtained greater than 11 years in jail for her half within the scheme, which has been dissected in a e book, HBO documentary and award-winning TV sequence.
The scandal revolved across the firm’s false claims to have developed a tool that would scan for tons of of ailments and different potential issues with only a few drops of blood taken with a finger prick.
After years of selling the expertise, Holmes and Balwani had been warned that the blood assessments had been inaccurate, however they continued to boost cash from traders, together with from billionaires reminiscent of software program magnate Larry Ellison and media magnate Rupert Murdoch, and deployed the expertise in some Walgreens shops.
U.S. District Judge Edward Davila stated the monetary statements drawn up by Balwani “weren’t just projections, they were lies” and “a true flight from honest business practices.”
The case threw a brilliant gentle on Silicon Valley’s darkish aspect, exposing how its tradition of hype and boundless ambition might veer into lies.
Holmes, 38, might have gotten as much as 20 years in jail — a penalty that the choose might have imposed on Balwani, who spent six years as Theranos’ chief working officer whereas remaining romantically concerned with Holmes till a bitter cut 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 legal professional 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 incorrect remedy. The jury in Holmes’ trial additionally deadlocked on three costs.
Balwani was convicted on all 12 felony counts, and his attorneys sought a much more lenient sentence of simply 4 to 10 months in jail. Prosecutors for the Justice Department requested for 15 years. A probation report beneficial 9 years.
Federal prosecutors additionally need the choose to order Balwani to pay $804 million in restitution to defrauded traders — the identical quantity sought from Holmes. Davila deferred a call on restitution to a later listening to, simply as he did throughout Holmes’ Nov. 18 sentencing, when she obtained 11 1/4 years in jail.
In court docket 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 data techniques.
He later moved to Silicon Valley, the place he first labored as a pc programmer for Microsoft earlier than founding a web-based startup that he bought for tens of millions of {dollars} throughout the dot-com growth 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 stated he finally invested about $5 million in a stake in Theranos that finally grew to become price 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 expertise by no means labored as Holmes had boasted in glowing journal articles that likened her to Silicon Valley visionaries reminiscent of Apple co-founder Steve Jobs.
Before Theranos’ downfall, Holmes teamed up with Balwani to boost practically $1 billion from deep-pocketed traders.
“Mr. Balwani is not the same as Elizabeth Holmes,” his attorneys wrote in a memo to the choose. “”He truly invested tens of millions 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 comparable 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 solid Balwani as a ruthless, power-hungry confederate in crimes that ripped off traders and imperiled individuals who obtained 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.”
