Balwani and Holmes’ Personal Relationship Takes Center Stage in Criminal Trial, Fueling Continued Public Interest in Theranos Fraud Saga
Even as Balwani’s trial moves ahead, Hulu’s miniseries ‘The Dropout’ chronicles the pair’s romance and the company’s downfall while providing controversial subject matter for various media outlets
Unlike Theranos founder Elizabeth Holmes’ criminal trial for fraud which generated daily headlines across the nation, the related fraud trial of ex-Theranos COO Ramesh “Sunny” Balwani is not getting the same news coverage. Therefore, media have shifted their reporting to Balwani’s personal relationship with the Holmes, which is clearly having its moment in the media spotlight.
The release of the Hulu miniseries “The Dropout”—which chronicles Holmes’ failed attempt to revolutionize the clinical laboratory industry by developing a device capable of performing multiple clinical blood tests using a finger-stick of blood—created the initial media and TV-viewer buzz.
Now a diverse range of media, including Fortune, The New York Post, and The Guardian, are turning their attention to the former Theranos executives’ private relationship during the time when they were in charge at the failed medical laboratory company.
As “The Dropout” outlines, Holmes gained celebrity status after dropping out of Stanford University at age 19 and founding Theranos in 2003. Years later, when Theranos claimed its Edison blood-testing device could conduct hundreds of blood tests using a finger-prick of blood, the startup’s valuation soared to nearly $9 billion in 2014, making Holmes a billionaire based on her 50% stake in the company, Investopedia reported.
In “What Happened to Elizabeth Holmes and Sunny Balwani? Where the Shamed Theranos Execs are Today,” Fortune used the release of “The Dropout” to publish an update on Holmes and Balwani. The magazine notes Holmes’ family connections—she was a descendant of the founders of America’s first yeast company and the daughter of a former Enron executive and congressional aide—helped her early efforts at fundraising for Theranos.
Fortune also stated that Holmes’ “pedigreed background” enabled her to attract “luminaries” such as former Secretary of State Henry Kissinger and former CDC Director William Foege to the Theranos board and gained her access to high-profile investors.
Theranos, Holmes Cloaked in Secrecy, according to Fortune
While Holmes sought the spotlight when promoting Theranos, Fortune maintains the company’s work culture and Holmes herself were clocked in secrecy. The article states Holmes hired bodyguards to serve as her chauffeurs, installed bulletproof glass in her office windows, and did not allow workers in separate departments to discuss projects with one another.
Balwani met Holmes in 2002 while both were studying in Beijing as part of a Mandarin language summer program. He was 37 and married at the time, while Holmes was an 18-year-old high school student. Balwani was attending an MBA program at the University of California, Berkeley, which he entered after selling his shares in software company Commerce One in 2000 for nearly $40 million.
While Balwani had no training in biological sciences or medical devices, Holmes named him president of Theranos in 2009. The pair dated for a dozen years, but they kept their relationship secret from Theranos workers and investors. During Holmes’ fraud trial, Dark Daily reported on their private text message exchanges and her claims against Balwani of “intimate partner abuse.” (See Dark Daily, “Text Messages Between Theranos Founder Elizabeth Holmes and Ex-Boyfriend Ramesh “Sunny” Balwani Grab Headlines in Early Days of Fraud Trial.”)
Their relationship reportedly ended in 2016.
The New York Post reported Balwani sold the upscale Silicon Valley home he previously shared with Holmes for $15.8 million this past January. The 6,800-square-foot, five-bedroom, seven-bathroom house in Atherton, Calif., is a one-acre property, which The Post states was purchased by the couple for $9 million in 2013. Balwani bought out Holmes’ 50% stake in 2018.
“We are seeing a ton of interest following the Holmes trial, and I don’t think it’s going to go away,” he told The Guardian.
Potential Reason for Delay in Holmes’ Sentencing
Holmes was convicted in January on four counts of fraud, but she is not expected to be sentenced until September. Amanda Kramer, JD, a partner in the White Collar Defense and Investigations practice at Covington and Burling, LLP, and a former federal prosecutor, suggests that Holmes’ sentencing date may have been delayed until after Balwani’s trial due to the potential for new information to come to light.
“It’s not typical for a case to be sentenced eight months out, but this is not a typical case in many senses,” Kramer told NPR. “And some facts established in Balwani’s trial might prove to be relevant in Holmes’ sentencing.”
So, it appears clinical laboratory directors and pathologists may find more interesting insights about the problems at Theranos emerging from court testimony when it is time for Holmes to be sentenced and during the remaining days of Balwani’s trial. Stay tuned. Dark Daily will continue to bring you the relevant facts of the case.
—Andrea Downing Peck