Theranos exec Sunny Balwani sentenced to 13 years in prison for defrauding patients and investors

Theranos exec Sunny Balwani sentenced to 13 years in prison for defrauding patients and investors

The former COO of disgraced blood testing startup Theranos, Ramesh “Sunny” Balwani was sentenced to 155 months, or about 13 years, in prison, and three years of probation. After a three-month trial, Balwani was found guilty on all 12 criminal charges, ranging from defrauding patients and investors to conspiring to commit fraud. Theranos CEO Elizabeth Holmes was convicted on four of these charges and was sentenced to 11. 25 years in prison last month.

Despite the disparate outcomes from the two separate juries in two individual trials, Judge Ed Davila calculated Holmes’ and Balwani’s sentencing ranges to be exactly the same: 135 to 168 months, or 11. 25 to 14 years. In both cases, prosecutor Jeff Schenk countered by asking for 15 years.

Balwani was not CEO, so his lawyers tried to argue for a more lenient sentence.

Coopersmith: “Mr Balwani never wanted anyone to be harmed. He would never hurt a fly. Instead, he wanted to give…He’s deserving of a lenient sentence…
He’s not Ms. Holmes. He didn’t seek fame and fortune. “

— Evan Sernoffsky (@EvanSernoffsky) December 7, 2022

“He is not Ms. Holmes. He did not pursue fame and fortune,” said Balwani’s attorney Jeffrey Coopersmith.

Judge Davila even noted that the court saw another side of Balwani when they were told about his charitable giving, some of which occurred after Theranos. Yet Balwani still received a severe sentence of 13 years.

Judge Davila noted that sentencing can be individualized and that the court was informed about Balwani’s charitable gifts. Some were given before Theranos but many were later. He also paid tuition for his relatives and donated to his temple. The judge said, “That shows another side to him.”

— Dorothy Atkins (@doratki) December 7, 2022

Holmes and Balwani were supposed to be tried for fraud together, but the former CEO filed for a separate trial, stating that Balwani, who is 20 years her senior, had emotionally and sexually abused her during their long romantic relationship. Although the court did not rule on these allegations, the judge granted the request.

Balwani’s lawyers tried to argue that he was an executive and investor at Theranos but not involved in decision-making. However, the defense did not argue for his innocence. One piece of evidence was presented to the jury by Balwani and Holmes. It read: “I am responsible all at Theranos .”

.”

Balwani was indicted on the same evidence as Holmes. The prosecution focused on one key piece of evidence that relates to Theranos’ relationship to Walgreens. The biotech startup’s faulty technology made its way into 41 Walgreens stores, but unbeknownst to the pharmacy giant, most of the tests were conducted on third-party equipment. Theranos’ machines were not able to produce accurate results so many patients had their blood drawn intravenously. So, Walgreens basically spent $140 million in its partnership with Theranos, only for the startup to use the same old tech that was already in use.

Despite claims to the contrary a Walgreens executive testified he worked closely alongside Balwani in the transaction. Also, the prosecution presented evidence of Balwani’s text to Holmes that stated that he didn’t inform Walgreens about their different machines.

For patients who were unfortunate enough to have their blood tested using Theranos’ technology some received wildly inaccurate results which caused severe disruption to their lives. In one case, a mother with a history of miscarriages was wrongly informed that she would have another unsuccessful pregnancy. Another patient, Erin Tompkins, used Theranos for its low costs, got flagged as HIV-positive, and then lived in limbo for three months until she could afford a second blood test. It turned out that she didn’t have HIV. Mehrl Ellsworth, a patient, was also given a false diagnosis of cancer.

Unlike Holmes’ jury, the jury at Balwani’s trial found him guilty of defrauding patients and not investors.

Before the former COO’s sentencing hearing, Balwani’s lawyers filed 40 objections to the probation office’s pre-sentence investigation report, according to tweets from Law 360 reporter Dorothy Atkins, who was present at the hearing. Judge Davila presided over Holmes’ trial and said that only four of the objections were substantive.

The attorneys continue to argue over expert reports and loss calculation. Sentences hearings, regardless of the crime, are usually morbid. It’s like watching a car accident in which families and lives are destroyed. This one feels more like an accounting class.

— Dorothy Atkins (@doratki) December 7, 2022

“Usually sentencing hearings are morbid regardless of the crime — like watching a car crash where you watch families and lives being destroyed in real time,” Atkins tweeted from the court room. “This one feels more like an Accounting class .”

It would not be unusual for Balwani to appeal this decision. After Holmes’ own sentencing, the former Theranos CEO told a California federal judge that she would appeal her conviction. She asked for a stay of custody while her appeal was being considered. She also mentioned that she is currently pregnant with her second baby. As it stands, Holmes’ surrender date is April 27, while Balwani will report to prison on March 15.

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