Theranos Fraud: Ex-COO Sunny Balwani Found Guilty Too, 6 Months After Founder Elizabeth Holmes’ Conviction

Ramesh 'Sunny' Balwani's sentencing date has not been set yet. The wire fraud counts carry a maximum sentence of 20 years each in prison, and the conspiracy count a maximum of five years.

File photo of former Theranos COO Ramesh "Sunny" Balwani at the Robert F. Peckham US Federal Court in San Jose, California, when the trial started in March 2022.

Source : Getty

A US court has found Ramesh “Sunny” Balwani, the former chief operating officer of blood testing startup Theranos, guilty of all 12 criminal fraud charges against him, six months after the company's founder Elizabeth Holmes was convicted convicted on four of 11 counts "in a multi-million-dollar scheme to defraud investors", media reports said.

When it was launched, Theranos had promised to revolutionise blood testing as it said these would be cheaper, faster and less painful than traditional lab tests.

Balwwani, 57, had his two brothers by his side as he appeared in the US District Court in San Jose, California, Thursday, CNN reported. 

After the court read out the verdict, the family members could be seen consoling Balwani, who did not seem to betray any emotion standing in front of Judge Edward Davila, the report said. 

Jurors deliberated for five days, hearing 24 government witnesses who called Balwani an accomplice to Holmes, according to the report.

While the sentencing date has not been set yet, the wire fraud counts carry a maximum sentence of 20 years each in prison, and the conspiracy count carries a maximum of five years.

Quoting legal experts, the CNN report said Balwani might appeal against the verdict.

Who is Ramesh 'Sunny' Balwani?

Ramesh 'Sunny' Balwani, the former president and COO of Theranos, along with founder Elizabeth Holmes, had been charged with engaging "in a multi-million-dollar scheme to defraud investors" to promote Theranos, according to the US Department of Justice. 

While Balwani and Holmes were said to be in a relationship at one point, the latter had accused him of sexual harassment.

According to different media reports, Balwani was born into a Sindhi family in Pakistan in 1965, but was raised in India. The family later migrated to the US, where Balwani studied at the University of Texas (Austin).

He reportedly met Holmes during a summer trip to Beijing, China, in 2002 through Stanford University’s Mandarin programme. He was 37 then, 20 years her senior. Balwani and his Japanese artist wife Keiko Fujimoto divorced the same year.

In 2009, Balwani joined Theranos as the president of the company. In a 2014 interview to Fortune, he said he got interested in Theranos because of Holmes’ ambition for the unique start-up.

The Theranos Trial

The trial in the Theranos fraud case against Balwani, which began in March this year, experienced several delays due to the pandemic. 

According to reports, the prosecutors said Balwani conspired with founder Holmes, also his ex-girlfriend, in a scheme spanning a decade to cheat investors and patients of hundreds of millions of dollars to keep the company afloat.

They claimed Balwani oversaw Theranos’ "grossly inflated financial projects", the laboratory operations and a doomed Walgreens deal.

“Balwani is not a victim,” Assistant US Attorney Jeffrey Schenk said in his closing argument, according to the CNN report. “He is a perpetrator of the fraud… Mr. Balwani knows that the biggest threat to fraud is the truth.”

Holmes was convicted in January this year, by a separate jury that found her guilty of three counts of criminal wire fraud and one count of conspiracy. Her sentencing will be in September, and she is currently on bail.

The Silicon Valley firm had raised nearly $1 billion from many powerful investors, including media mogul Rupert Murdoch, Oracle co-founder Larry Ellison, Silicon Valley investor Don Lucas, Walmart’s Walton family, among others.