Ex-Theranos COO Sunny Balwani found guilty on 12 fraud charges

Published: Jul 08, 2022

By Alex Keown

BioSpace

Ramesh “Sunny” Balwani, Elizabeth Holmes’ former business and romantic partner and former COO of Theranos, was found guilty of all 12 fraud charges brought against him for his role in the Theranos scandal. In 2018, he, along with Holmes, was charged with multiple counts of wire fraud and conspiracy to commit fraud.

Following the weeks-long trial of Holmes, which resulted in a guilty verdict on four fraud charges, Balwani’s outcome seemed a foregone conclusion. Balwani’s trial began in May and lasted nearly three months. 

Ultimately, he was found guilty of all 12 counts of fraud. The breakdown of those charges was 7 counts of wire fraud for defrauding Theranos investors, 2 counts of wire fraud for defrauding paying patients, 2 counts for conspiring to defraud investors and patients. Additionally, Balwani was found guilty of one count of wire fraud related to Theranos advertisements to patients in Arizona, where the company had a deal with Walgreen’s. 

Balwani and Holmes were both charged in 2018. The government said the duo engaged in a multi-million dollar scheme to defraud company investors. They were also accused of operating a separate scheme to defraud doctors and patients, the U.S. Department of Justice said when the charges were handed down in 2018. Instead of trying both cases together, Holmes and Balwani were given separate trials. They were both tried in the same San Jose, California courtroom, and the cases were overseen by the same judge, Edward Davila. 

At Theranos, Balwani served as the company’s president and chief operating officer. He joined several years after Holmes started the company. His attorneys, who plan to appeal the verdict, attempted to frame him as a mere player in Holmes’ game who left the company in a strong financial position when he stepped down from his role in 2016.

At that time, Theranos had a valuation of about $9 billion, and as BioSpace has previously reported, it was about the time of his departure that whistleblowers began to leak information about the failures of the company’s blood-testing device, as well as allegations of data manipulation at the company. When Balwani joined Theranos, he was already a wealthy businessman, having made his fortune in the dot com boom.

On the other hand, the prosecution argued that Balwani worked hand-in-hand with Holmes to defraud investors. The prosecution said they were “partners in everything, including their crimes.” The two began a romantic relationship shortly after Holmes dropped out of Stanford University at 19. He was 38 at the time. 

During Holmes’ testimony in her trial, she called him “controlling and abusive.” She testified that he groomed her in business and forced her to engage in sexual activities following heated arguments to prove his love for her. 

Holmes is expected to be sentenced in the next several weeks. She could face up to 20 years for her crimes. Sentencing was delayed until the completion of Balwani’s trial. 

Each fraud count could carry a maximum of 20 years in prison and hundreds of thousands of dollars in fines for Balwani. He will be sentenced at a later date. 

Source: BioSpace