- The 57-year-old Indian American faces the same charges as CEO and ex-girlfriend Elizabeth Holmes and has been on trial since March on nine counts of wire fraud and two counts of conspiracy to commit wire fraud.
The trial of Ramesh “Sunny” Balwani, the former president of Theranos, and former boyfriend of founder and CEO Elizabeth Holmes, is headed to a verdict soon. Closing arguments for the three-month-long case were held in a San Jose, California, courtroom on June 21.
The New York Times notes that while the prosecutors have tied Balwani directly to Holmes and the fraud at the failed blood-testing company, his lawyers have tried to distinguish him from his ex-girlfriend.
“Balwani is not a victim, he is the perpetrator of the fraud,” assistant U.S. attorney and a lead prosecutor in the case, Jeffrey Schenk said near the end of his 3 1/2-hour closing argument before the jury, according to The Times. On the other hand, his lawyer Jeffrey Coopersmith told the court that Balwani “put his heart and soul into Theranos,” and “worked tirelessly, year after year, to make the company a success.”
The 57-year-old Indian American faces the same charges as the 37-year-old Holmes and has been on trial since March on nine counts of wire fraud and two counts of conspiracy to commit wire fraud. Balwani’s trial “largely mirrored” Holmes’, The New York Times noted.
Holmes and Balwani were charged in 2018. According to the indictment unsealed on June 15, 2018, the pair had engaged in a multi-million dollar scheme to defraud investors and a separate scheme to defraud doctors and patients, and both schemes entailed promotion. If convicted, each of them could face 20 years in prison and fines of $250,000, plus restitution, for each count of wire fraud and for each conspiracy count. They both pleaded not guilty.
This January, Holmes was found guilty on four charges of defrauding investors for her role in building the blood-testing startup into a $9 billion company that collapsed in scandal. She remains free on bond, and her sentencing has been scheduled for Sept. 26. She faces up to 20 years in prison, a $250,000 fine, and the requirement to pay victims restitution for each count on which she was convicted.
Holmes had founded Theranos in 2003 as a 19-year-old college dropout and was hailed and celebrated as a Silicon Valley whiz-kid. The company was aiming to revolutionize medical laboratory testing through allegedly innovative methods for drawing blood, testing blood, and interpreting the resulting patient data to improve outcomes and lower health care costs.
In both the trials, text messages between Holmes and Balwani played a curial role in establishing their relationship as well as their role in the fraud.
While Holmes was the face of Theranos, Balwani’s influence was felt in all areas of the company. That message was conveyed in texts by Bawalni as well, which jurors heard during his ongoing trial. “I am responsible for everything at Theranos,” Balwani wrote, according to NBC Bay Area. The text message is contradictory to arguments from Balwani’s legal team, “who argued he was merely an investor in Theranos during the opening arguments of his fraud trial last month,” an NBC Bay Area report said.
The same text resurfaced during the June 21 closing arguments. The text was an admission of guilt by Balwani, Schenk said, as per The Times. “He’s acknowledging his role in the fraud,” Schenk added.
In the course of the three months, the court heard from several witnesses who worked directly with Balwani. One of them was Patrick Mendenhall, who, according to The New York Times, “dealt directly with Balwani while making an investment in Theranos, outlined the promises that turned out to be misleading or false.”
Another testimony was from Brian Grossman, an investor at the hedge fund PFM Health Sciences, who was also a witness in Holmes’s trial. The Times said he testified that “Balwani had provided his team with financial projections that far overstated Theranos’s projected revenue..”
Conspicuously absent from the witness stand was Holmes, who was a prominent figure in the trial. Since Balwani’s trial began, legal experts and those following the case have speculated whether Holmes might testify against Balwani “in exchange for some leniency in her sentencing,” Business Insider noted, adding that it’s unclear “whether she was offered that opportunity.” Balwani did not testify in his defense.
The New York Times reported that if Balwani is convicted, he and Holmes will be sentenced together in September.