Theranos ex-COO and President Balwani will be sentenced on Nov. 15, while former CEO Elizabeth Holmes has her sentencing on Sept. 26
Observers within the clinical laboratory industry likely were not surprised to hear that Ramesh “Sunny” Balwani was convicted on Thursday of 12 counts of fraud related to his work at disgraced medical laboratory testing startup Theranos.
After all, Balwani’s conviction comes six months after a similar verdict for Elizabeth Holmes, the former founder and CEO of Theranos. The two were romantically involved during their time at the company.
A jury in San Jose deliberated for several days before reaching the guilty verdict against Balwani, 57, on a dozen counts of wire fraud and conspiracy to commit wire fraud. He is the former chief operating officer and president at the Theranos. Holmes was convicted of four counts in January.
“The jury concluded that Balwani perpetrated frauds on unsuspecting patients,” Stephanie Hinds, US Attorney for the Northern District of California, told the press after the verdict.
Balwani didn’t provide any comments to the two dozen or so reporters and photographers who followed him as he left the courthouse.
Balwani, Like Holmes, Faces 20 Years Behind Bars
Balwani will be sentenced on Nov. 15, reported NBC Bay Area. Holmes is scheduled to be sentenced on Sept. 26. She and Balwani each face up to 20 years in prison on each count, although a judge could allow those terms to run concurrently for each individual.
At the core of Balwani’s trial was whether he knew that Theranos allegedly defrauded patients and investors about its proprietary Edison blood-testing machine. The government argued that Balwani realized the Edison analyzer did not work and that he should have informed investors about the poor accuracy of the equipment.
As The Dark Report noted in its April 25 issue, keen laboratory directors and pathologists following the trial and verdict would be wise to review how the proceedings put the spotlight on lab director duties required under the Clinical Laboratory Improvement Amendments of 1988.
‘I am Responsible for Everything at Theranos’
In the end, the jury did not believe Balwani’s contention that he was merely an investor who let Holmes steer business matters at Theranos. Jurors saw text messages between Balwani and Holmes that defied that defense strategy.
For example, in one text to Holmes, Balwani wrote, “I am responsible for everything at Theranos,” NBC Bay Area reported during the trial.
A profile on Balwani published in March 2022 by The Cut, a website affiliated with New York magazine, also pushed the idea he had influence. “While many questions remain about Balwani’s role in the Theranos scheme, he definitely wielded a lot of power at the company,” The Cut reported.
Balwani and Holmes were indicted by federal prosecutors in June 2018. The indictments followed a three-year investigation by the government, which occurred after a blockbuster series of articles by the Wall Street Journal that detailed complaints from whistleblowers who formerly worked at Theranos.
Balwani never took the stand in his own defense. However, during closing arguments, his attorney, Jeffrey Coopersmith, JD, said Holmes’ charm influenced Balwani, much like it did Theranos investors.
“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,” Coopersmith told the jury, as reported by Bloomberg. “He bought into that vision not only with his time but also with his own money,” investing $4.6 million in Theranos.
Compared to Holmes’ trial, which attracted huge media attention from around the world, Balwani’s proceedings occurred to much less hype and fanfare, given he was not as well known as Holmes to the general public and press.
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