A judge Wednesday sentenced former Theranos executive Ramesh “Sunny” Balwani to nearly 13 years in prison for his role in the company’s blood test hoax. Silicon Valley’s biggest scandal.
Balwani was convicted in July of fraud and conspiracy related to the company’s bogus medical technology that defrauded investors and endangered patients. His sentence comes less than three weeks after the company’s founder and CEO, Elizabeth Holmes, was sentenced to more than 11 years in prison for her involvement in the scheme.
The scandal revolved around the company’s false claims that it had developed a device that could scan for hundreds of diseases and other potential problems simply by pricking a finger and taking a few drops of blood.
The incident shed a bright light on Silicon Valley’s dark side, revealing how a culture of hype and boundless ambition can turn into lies.
Holmes, 38, could have been sentenced to up to 20 years in prison — U.S. District Judge Edward Davila ruled Theranos’ chief operating officer while maintaining a romantic relationship with Holmes until their bitter split in 2016. was able to impose any punishment that could have been imposed on Balwani, who spent six years as a prisoner of war. .
While on the witness stand at the trial, Holmes accused 57-year-old Balwani of manipulating her through years of emotional and sexual abuse. Balwani’s attorneys have denied the allegations.
The two trials yielded somewhat different results. Unlike Balwani, Holmes was acquitted of several charges of fraud and conspiracy against those who paid for Theranos’ blood tests, which could lead to misleading results and lead patients to wrong treatment. At Holmes’ trial, the jury was also bogged down with three charges against him.
Balwani was convicted of all 12 felonies, and his attorney sought a much lighter sentence of four to 10 months in prison. Justice Department prosecutors asked him to be suspended for 15 years. The probation report had him recommending nine years.
Former federal prosecutor and now defense attorney Duncan Levin said Balwani’s bid for a lighter sentence was “totally unrealistic.” Levin suspects the judge will give more weight to the Department of Justice and probation office recommendations.
A judge ultimately sentenced her to 11 1/2 years in prison and recommended she be served at a low-security facility in Bylan, Texas.
Federal prosecutors are also seeking a judge to order Balwani to pay $804 million in damages to deceived investors. Davila postponed a decision on the return until an unspecified future date during Holmes’ November 18 sentencing.
In court documents, Balwani’s attorneys portrayed him as a hard-working immigrant who moved from India to the United States in the 1980s and was the first in his family to attend college. I got
He then moved to Silicon Valley, where he worked as a computer programmer at Microsoft and founded an online startup that sold for millions of dollars during the dot-com boom of the 1990s.
Balwani and Holmes met around the same time she dropped out of Stanford University to found Theranos in 2003.
Balwani’s attorneys said he ended up investing about $5 million in Theranos stock, which was ultimately worth about $500 million on paper.
That wealth vanished after Theranos began to unravel in 2015, amid revelations that its blood-testing technology didn’t work at all. This is because Holmes boasted in a stellar magazine article that likened her to Silicon Valley visionaries such as her Apple co-founder Steve Jobs.
Before Theranos’ demise, Holmes worked with Balwani to raise nearly $1 billion from rich investors including software mogul Larry Ellison and media mogul Rupert Murdoch.
“Mr. Balwani is not the same as Elizabeth Holmes,” his attorney wrote in a memo to the judge. He didn’t ask for an evaluation.He has a long history of quietly donating to those in need.” Balwani’s attorney also claims Holmes is “dramatically responsible” for Theranos’ fraud. did.
Reflecting similar allegations made by Holmes’ attorneys before the sentencing, Balwani’s attorneys also said they were duly punished for the intense media coverage of Theranos, which has been the subject of a book, documentary and award-winning TV series. claimed.
Balwani has “lost his career, reputation and ability to work meaningfully again,” his attorney wrote.
Federal prosecutors have accused Balwani of being a ruthless and power-hungry accomplice in crimes that defraud investors and endanger those who receive flawed results. The blood test was to be available in his partnership with Walgreen’s, which Balwani helped engineer.
“Balwani submitted false stories about Theranos’ technical and financial stability every day in meetings that lasted for days,” the prosecutor wrote in a memo to the judge. “Balwani maintained the façade of this achievement even after honesty made him a calculated decision to destroy Theranos.”
Our new Weekly Impact Report newsletter examines how ESG news and trends are shaping the roles and responsibilities of today’s executives. Subscribe here.
