Ramesh BalwaniThe former chief operating officer of failed blood-testing start-up Theranos has been sentenced to nearly 13 years in prison for misleading investors and patients about the company’s business and technology.
Mr. Balwani, 58, and his convicted co-conspirator, Theranos founder Elizabeth Holmes, 38, promised the start-up would revolutionize health care with machines and tests that could diagnose certain diseases using just a few drops of blood. . But those claims were false, and Theranos became a story Silicon Valley’s ambition and excitement run amok.
Mr. Balwani known as Sunny criminal 10 counts of wire fraud and two counts of conspiracy to commit wire fraud in July.
Judge Edward J. of the U.S. District Court for the Northern District of California. Davila, Mr. Balwani was sentenced to 155 months, which is 12 years and 11 months, plus three years of supervised release. Mr. Balwani is expected to surrender to custody on March 15.
His sentence was long than Mrs. Holmes Found guilty Four scams in January and Sentenced Jailed for over 11 years last month. Mr. Balwani plans to appeal. His lawyers requested that he be assigned to a minimum-security satellite camp in Lombok, California.
While wire fraud carries a maximum sentence of 20 years in prison, prosecutors said Mr. They asked that Balwani be sentenced to 15 years in prison and ordered to pay more than $800 million in restitution to investors. His lawyers asked for probation only.
Lawyers told Judge Davila that a long sentence would discourage Silicon Valley entrepreneurs and start-up founders from stretching the truth, as they did in Ms. Holmes’ case. In court filings, they also wrote that a longer sentence “rebuilds the confidence that investors need to have when funding innovators.”
The Epic Rise and Fall of Elizabeth Holmes
The story of the Theranos founder, from a $9 billion valuation to a fraud conviction, has come to symbolize the perils of Silicon Valley’s culture.
Assistant U.S. Attorney and Chief Prosecutor Jeffrey Schenk said in court Wednesday that Mr. Balwani, Ms. He said he should get a longer sentence than Holmes because he oversaw Theranos’s lab, which put patients at risk.
“Mr. Balwani had significant autonomy in running the lab. He made decisions that directly affected the information given to patients,” Mr. Schenck said. The lab, he said, was the source of “some great harm.”
Mr. Balwani’s lawyer, Geoffrey Coopersmith, accused Ms Holmes, who was not found guilty, of defrauding patients. “He was the CEO, he was the face of Theranos,” he said.
Mr. Balwani, who was present in court with his family members, did not read a statement to the judge. None of the victims spoke.
Michael Weinstein, a former federal prosecutor who practices white-collar litigation at the law firm Cole Scotts, said Mr. Balwani said he faced hurdles. Mr. He added that since Balwani is “a bit older and wiser”, “the court will expect more from him as an administrator”.
Prior to Theranos, Mr. Balwani has worked in software companies and helped lead an e-commerce start-up. $40 million Paying at the height of the dot-com boom. He and Ms. Holmes met when he was 37 and she was 18, and they began secretly dating in 2003, shortly after Ms. Holmes launched Theranos. Mr. Balwani joined the company in 2009 and invested $4.6 million.
After The Wall Street Journal exposed in 2015 that Theranos’ experiments were not working as advertised, Mr. Palwani left the company in 2016 and split with Ms Holmes. Theranos shut down in 2018.
That year, federal prosecutors charged Mr. Balwani and Ms. Holmes were charged with fraud. Their cases were then divided, and Mr. Palwani went to investigate This year.
Prosecutors argued at trial that Theranos’ technology did not perform as promised because he was involved in every part of the business. Apart from heading the company’s lab, he made its financial projections and attended several meetings with investors.
Mr. Balwani’s lawyers argued that he was a genuine believer in Theranos and its mission. Mr. They said Ms Holmes, not Balwani, was responsible.
Each defendant was frequently mentioned at the other’s trial, but they did not testify against each other. At her trial, Mrs. Holmes Accused Mr. Balwani has committed emotional and sexual abuse which Mr. Balwani has denied it and was not admitted into evidence at his trial.
Ultimately, Mr. The jury found Balwani guilty. After his conviction, he requested a new trial and was denied.
In April, Ms. Holmes plans to appeal his case in a filing this week. In it, Mr. He cited lawyers’ differing accounts of his relationship with Balwani. At his trial the pair were equally awarded. But Mr. At Balwani’s trial, his attorneys wrote, “the government took the opposite position and highlighted Mr. Balwani’s age, experience and influence over Ms. Holmes.”
Mr. Before sentencing Balwani, Judge Davila, Mr. He reflected on Balwani’s academic and business history, saying the executive’s previous successes made his actions at Theranos “pathetic.”
“It was a successful business. The idea was strong,” Judge Dávila said, referring to Theranos. But when problems arose at the company, he said, Mr. Balwani “chose to move forward with guile.”
Erin Griffith Contributed report.
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