Elizabeth Holmes’ former lover faces sentencing in Theranos case

A former Theranos govt learns Wednesday whether or not he can be punished as severely as his former lover and enterprise associate for peddling the corporate’s bogus blood-testing expertise that duped buyers and endangered sufferers.

The sentencing for Ramesh “Sunny” Balwani, who was convicted in July of fraud and conspiracy, comes lower than three weeks after Elizabeth Holmes, the corporate’s founder and CEO, acquired greater than 11 years in jail for her function within the scheme. The scandal revolved across the firm’s false claims to have developed a medical system that would scan for tons of of illnesses and different potential issues with just some drops of blood taken with a finger prick.

The case threw a vibrant gentle on Silicon Valley’s darkish aspect, exposing how its tradition of hype and boundless ambition might veer into lies.

Holmes, 38, might have gotten as much as 20 years in jail — a penalty that U.S. District Judge Edward Davila might now impose on Balwani, who spent six years as Theranos’ chief working officer whereas remaining romantically concerned with Holmes till a bitter break up in 2016.

While on the witness stand in her trial, Holmes accused Balwani, 57, of manipulating her by way of years of emotional and sexual abuse. Balwani’s lawyer has denied the allegations.

The two trials had considerably completely different outcomes. Unlike Balwani, Holmes was acquitted on a number of prices of defrauding and conspiring in opposition to individuals who paid for Theranos blood exams that produced deceptive outcomes and will have pointed sufferers towards the mistaken remedy. The jury in Holmes’ trial additionally deadlocked on three prices.

Feds search 15 years

Balwani was convicted on all 12 felony counts, and his attorneys contend he deserves a much more lenient sentence of simply 4 to 10 months in jail, ideally in house confinement. Prosecutors for the Justice Department are searching for 15 years. A probation report recommends 9 years.

Duncan Levin, a former federal prosecutor who’s now a protection lawyer, described Balwani’s bid for a lightweight sentence as “utterly unrealistic.” Levin suspects the choose could give better weight to the Justice Department and the probation workplace suggestions, which mirror the sentences these companies hunted for Holmes.

The choose finally gave her 11 1/4 years in jail and really helpful that the sentence be served in a low-security facility in Byran, Texas.

The Justice Department “has now conceded that both defendants deserve the same sentence, even though Balwani was convicted for far more counts,” Levin mentioned. Since Holmes bought an 11-year sentence, “it follows logically that he will get the same sentence.”

Federal prosecutors additionally need the choose to order Balwani to pay $804 million in restitution to defrauded buyers — the identical quantity sought from Holmes. Davila deferred a choice on restitution throughout Holmes’ Nov. 18 sentencing till an unspecified future date.

In court docket paperwork, Balwani’s attorneys painted him as a hardworking immigrant who moved from India to the U.S. in the course of the Nineteen Eighties to turn into the primary member of his household to attend school. He graduated from the University of Texas in 1990 with a level in data techniques.

He later moved to Silicon Valley, the place he first labored as a pc programmer for Microsoft earlier than founding a web-based startup that he offered for tens of millions of {dollars} in the course of the dot-com growth of the Nineteen Nineties.

Balwani and Holmes met across the similar time she dropped out of Stanford University to begin Theranos in 2003. He grew to become enthralled along with her and her quest to revolutionize well being care.

Balwani’s attorneys mentioned he ultimately invested about $5 million in a stake in Theranos that ultimately grew to become price about $500 million on paper — a fraction of Holmes’ one-time fortune of of $4.5 billion.

Balwani’s protection

That wealth evaporated after Theranos started to unravel in 2015 amid revelations that its blood-testing expertise by no means labored as Holmes had boasted in glowing journal articles that likened her to Silicon Valley visionaries akin to Apple co-founder Steve Jobs.

Before Theranos’ downfall, Holmes teamed up with Balwani to boost practically $1 billion from deep-pocketed buyers that included software program mogul Larry Ellison and media magnate Rupert Murdoch.

“Mr. Balwani is not the same as Elizabeth Holmes,” his attorneys wrote in a memo to the choose. “”He really invested tens of millions of {dollars} of his personal cash; he by no means sought fame or recognition; and he has a protracted historical past of quietly giving to these much less lucky.” Balwani’s lawyers also asserted that Holmes “was dramatically extra culpable” for the Theranos fraud.

Echoing similar claims made by Holmes’s lawyers before her sentencing, Balwani’s attorneys also argued that he has been adequately punished by the intense media coverage of Theranos, which has been the subject of a book, documentary and award-winning TV series.

Balwani “has misplaced his profession, his repute and his capacity to meaningfully work once more,” his lawyers wrote.

Federal prosecutors cast Balwani as a ruthless, power-hungry accomplice in crimes that ripped off investors and imperiled people who received flawed results. The blood tests were to be available in a partnership with Walgreen’s that Balwani helped engineer.

“Balwani introduced a faux story about Theranos’ expertise and monetary stability day after day in assembly after assembly,” the prosecutors wrote in their memo to the judge. “Balwani maintained this façade of accomplishments, after making the calculated determination that honesty would destroy Theranos.”