Ramesh ‘Sunny’ Balwani was brought in to help steer Theranos, the health technology company Elizabeth Holmes had founded at age 19 in 2003. While she was the face of the firm, Balwani as COO ran the everyday operations – all the while the duo kept their romance under wraps
Former Theranos executive Ramesh “Sunny” Balwani was on Thursday found guilty of participating in a massive fraud with disgraced CEO Elizabeth Holmes in a company that was once the toast of Silicon Valley and valued at $9 billion.
The 12 jurors found Balwani guilty on all 12 felony counts of defrauding both Theranos investors and the patients who relied on wildly unreliable blood tests that could have jeopardised their health.
Balwani sat impassively as the verdicts were read in a San Jose, California, court, blinking frequently but rarely looking at the seven women and five men who convicted him.
The outcome leaves Balwani and Holmes, who was convicted on four counts of investor fraud and conspiracy earlier this year, in similar situations – facing 20 years in prison.
Sentencing has been scheduled for 15 November.
Let’s take a closer look at the life and career of Balwani, his meeting with Holmes, involvement in Theranos and his fall from grace:
Early life and career
As per The Wall Street Journal, Balwani is an immigrant from a long line of farmers. He studied information systems at the University of Texas, graduating in 1990. He holds a Master’s Degree in business administration in 2003 from the University of California, Berkeley.
Balwani made his fortune running e-commerce start-up Commercebid.com which was sold in 1999 for around $228 million in cash and stock.
Balwani received shares as part of the deal that he sold for more than $40 million, based on a lawsuit he later filed against a tax adviser, as per the report.
The veteran tech software executive worked at Lotus and Microsoft.
Meeting Holmes, involvement with Theranos
As per BBC, Holmes and Balwani reportedly first met when she took a college trip to Beijing at the age of 18.
Balwani divorced his wife, a Japanese artist, around the time he met Holmes, two decades his junior.
Their relationship turned romantic around the time that Holmes was starting Theranos in 2003.
Balwani later supported Holmes’s decision to drop out of Stanford University and start the company that would become Theranos, she testified in her trial, as per the Wall Street Journal.
They lived together from 2005 to 2016, at one point buying a house in Atherton, Calif., a tony Silicon Valley enclave, for $9 million, according to evidence presented at her trial.
Balwani was brought in as Chief Operating Officer to help steer the company Holmes had founded at age 19.
Holmes had promised self-service testing machines that could run an analytical gamut cheaply and on just a few drops of blood, but investors were as much drawn to the promise of the technology as they were to her deep, authoritative voice, black Steve Jobs-esque turtleneck.
The company touted work with drugmakers, pharmacies and the US military and received investments from media mogul Rupert Murdoch.
While Holmes was undoubtedly the face of the company, it was Balwani who ran the everyday operations.
Fall from grace
Theranos collapsed after the Wall Street Journal starting in 2015 published a series of articles suggested its devices were flawed and inaccurate.
As per BBC, the couple went to great lengths to ensure that investors and employees were unaware of their romantic relationship before breaking up as the company fell apart in 2016.
Balwani and Holmes were charged in 2018 with lying to investors about the company’s finances and its machines’ ability to run a broad range of tests from a few drops of blood. Prosecutors also charged the pair with duping patients about the tests’ accuracy.
Holmes, who was charged separately from Balwani, at her trial, made the somewhat unusual decision to testify in her own defence and denied lying to investors.
During that trial, Holmes tearfully accused Balwani of sexually and emotionally abusing her while the two were romantically involved. An attorney for Balwani has vehemently denied those charges.
Holmes was convicted on four counts of investor fraud and conspiracy earlier this year, but has since argued that the evidence was insufficient to support the verdict. She is scheduled to be sentenced on 26 September.
His trial
Balwani’s defence attorneys attempted to portray him as a ‘loyal soldier’ who under the direction of Holmes tried to save the blood-testing company, as per The Guardian.
They pointed to the fact that Balwani used his own money as collateral when he guaranteed a $12 million loan to Theranos in 2009, and he later invested in the company “because he believed in Holmes’s vision”.
Ramesh ‘Sunny’ Balwani, right, the former business partner of Theranos CEO Elizabeth Holmes, leaves a San Jose, Calif., federal courthouse with his lawyers, after a jury convicted him. AP
As per BBC, Balwani had no medical training to speak of, and some thought that might be enough to convince a jury that he simply did not understand that Theranos’ technology didn’t work.
But as per TechCrunch, the defence failed to argue for Balwani’s innocence.
One piece of evidence presented to the jury was a text from Balwani to Holmes that read, “I am responsible for everything at Theranos.”
Unlike Holmes, Balwani did not take the stand to testify in his defence.
“Ms Holmes and Mr Balwani were partners in virtually everything,” prosecutor Robert Leach said earlier in the trial, as per BBC.
“The defendant and Holmes knew the rosy falsehoods that they were telling investors were contrary to the reality within Theranos.”
As per The Guardian, the guilty verdicts are being seen as an indictment of the tech industry, and the end of an era in which companies can ride unchecked hype backed by little substance to large amounts of funding.
The San Jose, California, jury deliberated for a little more than five days before convicting Balwani on two counts of conspiracy and 10 counts of fraud, a spokesperson for US Attorney Stephanie Hinds said.
“We are gratified by the jury’s hard work and attentiveness to the evidence presented,” Hinds said in a statement. “We appreciate the verdict and look forward to sentencing proceedings.”
Balwani’s attorney Jeffrey Coopersmith said the defence was “obviously disappointed with the verdicts” and would consider all options including an appeal.
With inputs from agencies
Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.