- The Indian American ex-boyfriend of founder and CEO Elizabeth Holmes is currently under trial for fraud charges in a federal court in San Jose, California.
The trial of Ramesh “Sunny” Balwani, former president of Theranos Inc., and ex-boyfriend of founder and CEO Elizabeth Holmes, has coincided with the release of the much anticipated Hulu series “The Dropout.” The limited drama series is based on ABC News/ABC Radio’s podcast about the rise and fall of Holmes and her private health care and life sciences company in Palo Alto, California. Amanda Seyfried portrays Holmes, while British Indian actor Naveen Andrews plays Balwani.
The series has caused a renewed interest in the outcome of Balwani’s trial. It is also helping in shedding light on Balwani, 56, who along with Holmes was originally charged in June 2018 with two counts of conspiracy to commit wire fraud and nine counts of wire fraud.
In early January, Holmes was found guilty on four charges of defrauding investors of criminal fraud 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.
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.
The relationship between Balwani and Holmes was the central focus of Holmes’ trial and also plays a pivotal role in Balwani’s.
And even without being in the courtroom, Holmes is a prominent figure in the trial.
While Holmes was the face of Theranos, Balwani’s private influence was present 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,” the NBC report said.
Earlier this month, a witness for the prosecution testified 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 health care and life sciences company, according to an NBC Bay Area report.
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.
“The company was low on cash, and I knew of the mission and that what the company was trying to do was paramount and I offered to help the company and I ended up giving a $13 million personal loan,” Balwani revealed in court testimony obtained by “The Dropout” podcast. “It was interest-free. It was a good-faith loan.”
Balwani, a technology entrepreneur, had already made millions before meeting Holmes and becoming involved in Theranos, as documented in “The Dropout.” For the acquisition of CommerceBid, 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.
In 2009, Balwani became the president and COO of Theranos. He and Holmes hid their relationship while they worked together. In 2016, the pair split up and Balwani left Theranos.
Around then, the legal issues started piling up—the Centers for Medicare and Medicaid Services banned Sunny from owning or operating a blood laboratory again, per Refinery29. And, the Securities and Exchange Commission filed four claims against him for violating the U.S. Securities Act. He didn’t have the nicest reputation at the company.
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.
Earlier in March, Balwani sold the 6,800-square foot home in Atherton, California, for $15.8 million, the New York Post reported. The two originally bought the mansion in 2013 for $9 million.
While Holmes and Balwani face similar charges, there are reportedly vast differences in both trials. The New York Times reported that “without an appearance by Holmes, Balwani’s trial seems unlikely to attract the intense attention of her trial, which lasted from last September to her January conviction.” That was evident on the first day of Balwani’s trial itself, The Times reported, “with only a few people lined up to get into the courthouse about an hour before it opened.” A “stark contrast to Holmes’ trial, which attracted long lines of people in the early morning hoping to get into the courtroom.”
Despite the limited reporting on Balwani’s trial, testimony heard so far, Holmes’ trial and “The Dropout” all help in understanding the Indian American who has played a major role in establishing and running the company.
While Balwani’s lawyer, Stephen Cazares has portrayed Balwani as an already successful entrepreneur who had left the company in better shape than when he joined it while providing a desperately needed infusion of cash, several employees have described Balwani as a bully and a tough boss. A former Theranos employee told 60 Minutes in May 2018 that Balwani “was abrupt with staffers and would fire people on the spot who didn’t produce the test results they were after.”
During her testimony, Holmes blamed Balwani for allegedly exploiting, using and misleading her. She told the court that what began as a professional relationship eventually turned amorous. The two became romantically involved in 2005 before Balwani became the chief operating officer at Theranos, a position he held from 2009 to 2016. They were together for 12 years.
She accused him 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.
To blame her ex-boyfriend for her mental state during the times she committed fraud, Holmes testified that her rape at Stanford played a role in her being subservient to Balwani. She told the court that after the incident, she stopped attending classes and immersed herself into building her company instead. “I was questioning what — how I was going to be able to process that experience and what I wanted to do with my life,” she told the court, according to news reports. “I decided that I was going to build a life by building this company.” Holmes mentioned that later when she told Balwani the trauma of her rape at Stanford, he told her she was safe, now that had met him.
However, the picture she painted of her ex-boyfriend was far from being a safety anchor for her. She told the court that he berated her and controlled her. When he was upset with her, he forced her to have sex with him, to show her that he loved her. “He told me that I didn’t know what I was doing in business, that my convictions were wrong, that he was astonished at my mediocrity,” she said, adding that he told her that she needed “to kill the person” if she was to become successful. “He felt like I came across as a little girl and thought I needed to be more serious and more pointed.”
At other times, Holmes said, Balwani would liken her to a “monkey flying a spaceship” and tried to cut her off from her family in an alleged effort to ensure that she devoted herself full-time to Theranos. She also said he controlled her diet in an attempt to keep her “pure.” She told the court that Balwani “wasn’t who I thought he was,” and that he “impacted everything about who I was and I don’t fully understand that.”