- The testimony came 24 hours after Balwani told the court that he had a big role in the Palo Alto, California-based health care and life sciences company.
There could be a possible twist in the trial of Ramesh “Sunny” Balwani, former president of Theranos Inc., a private health care and life sciences company in Palo Alto, California, and ex-boyfriend of founder and CEO Elizabeth Holmes.
Holmes was found guilty in January on four charges of defrauding investors of criminal fraud for her role in building Theranos into a $9 billion company that collapsed in scandal. Balwani has pleaded not guilty to charges of wire fraud and conspiracy to commit wire fraud.
Holmes, 38, and Balwani, 56, were originally charged in June 2018 with two counts of conspiracy to commit wire fraud and nine counts of wire fraud. 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.
Last week, a witness for the prosecution testified in a federal court in San Jose, California, that she only dealt with Elizabeth Holmes and didn’t even know who Balwani is. That testimony came 24 hours after Balwani told the court that he had a big role in the Palo Alto, California-based health care and life sciences company, according to an NBC Bay Area report.
That message was conveyed in text messages by Bawalni as well, which jurors heard a day earlier, on April 5. “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,” the NBC report said.
According to Balwani’s lawyer Stephen Casares, although his client began a relationship with Holmes around the same time she founded Theranos, he didn’t join the company until 2009. “At the time, he secured a loan from Theranos with $10 million of his own, then invested $5 million in a stake in the company that was eventually valued at $500 million,” Casares said, and added that Balwani believed in Theranos and was as shocked as the victim when he learned of its shortcomings, NBC reported.
Balwani, a technology entrepreneur, had already made millions before meeting Holmes and becoming involved in Theranos, as documented in Hulu’s “The Dropout,” which chronicles the rise and fall of Holmes. For the acquisition of CommerceBid, Sunny Balwani received $40 million. He helped launch the software development company CommerceBid in 1998, which was created to help organizations buy and sell commodities over the Internet, which was then gaining popularity. CommerceOne, a business-to-business e-commerce company that used auctions to connect companies with their suppliers, had its first trading day after going public in July 1999.
When he met Holmes, Bаlwаni, 37, was mаrried. After selling his shаres, he returned to school, аnd enrolled аt the University of Cаliforniа, Berkeley, During а 2002 Beijing trip as part of Stanford University’s Mаndаrin progrаm, he met 18-yeаr-old Holmes while а student. He аnd Holmes, who were reportedly mаrried аt the time, didn’t stаrt dаting until 2003 when he eаrned his MBA аnd she dropped out to pursue Therаnos. In 2005, the couple shаred а home.
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 Palo Alto, California-based Theranos 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.
Text messages also played a large role in Holmes’ fraud trial, during which jurors received some 600 pages of her personal correspondence.
During her testimony, Holmes accused Balwani of emotionally and sexually abusing her, which apparently compromised her judgment during the time of the alleged crimes. Holmes made the accusations during her much-anticipated testimony on Nov. 29, in an attempt to refute accusations that she lied about a flawed blood-testing technology, which she had touted as a breakthrough. She blamed Balwani for allegedly exploiting, using and misleading her.