A federal judge on Wednesday sentenced former Theranos president and chief operating officer Ramesh "Sunny" Balwani to a prison term of 12 years and 11 months, followed by three years of supervised release.
U.S. District Judge Edward Davila ordered Balwani to report to serve his sentence on March 15, 2023.
Last month, Balwani's co-conspirator and former lover, Theranos founder and CEO Elizabeth Holmes, received a term of 11 years and three months, with a surrender date of April 27, 2023.
Balwani was convicted of wire fraud and conspiracy in July for his role in the implosion of the now-defunct Theranos, which was based in Palo Alto, after its much-touted fingerstick blood-testing technology failed.
Although Balwani and Holmes were charged in the same indictment, the cases were tried separately.
The jury verdict in the Balwani case was significantly harsher than that in the Holmes case. The Holmes jury convicted her of four counts of wire fraud and conspiracy against investors, acquitted her of four counts related to patients who underwent Theranos' lab tests and did not reach a verdict on three additional investor-related charges.
Balwani, by contrast, was convicted of all 12 of the charges brought against him.
Prosecutors asked the court to sentence Balwani to a 15-year term, arguing that because of financial models prepared by Balwani and other fraudulent statements, "investors believed they were investing in a company that was going to receive significant income" in the very near future.
The defense countered that Balwani took a backseat role and played a much more low-key role than Holmes in the overall scheme.
"Even if you think that Ms. Holmes was Icarus and flew too close to the sun, Mr. Balwani was not Icarus," defense attorney Jeffrey Coopersmith said.
Balwani exercised his Fifth Amendment right to remain silent and did not address the court at the sentencing.
In explaining his decision, Davila pointed out "the disruption between this genius idea (of a revolutionary health technology) ... and wire fraud."
Balwani and Holmes, the judge said, "continued to perpetuate the fraud" even when they knew "that they could not produce what they said they could produce to their investors ... That's the disruption ... that prevented Theranos from going forward with this technology that had so much promise."
Comments
Registered user
College Terrace
on Dec 8, 2022 at 7:04 am
Registered user
on Dec 8, 2022 at 7:04 am
"That's the disruption ... that prevented Theranos from going forward with this technology that had so much promise.""
Huh? The technology held no promise. Theranos was a scam from the start, perpetrated by two skilled cons. It's amazing that Theranos advanced as far as it did and that so many smart people were hoodwinked. Scamming is always bad, but it is particularly reprehensible when it promises a health advantage that is utterly false.
Registered user
another community
on Dec 8, 2022 at 9:27 am
Registered user
on Dec 8, 2022 at 9:27 am
At least his sentence is slightly longer than hers.
So many "smart" people were "hoodwinked" because they got caught up in their own greed. It is sad that so many lives were at stake.
Registered user
Duveneck/St. Francis
on Dec 8, 2022 at 10:48 am
Registered user
on Dec 8, 2022 at 10:48 am
The immediate tragedy of this is that if someone comes along with a legitimate product in this area, they will have a hard time getting funding.
The deeper issue here is that the venture capital business model does not work for long-term problems. I suspect that it would take 15-20 years to develop something like Theranos to the point that it could be seriously tested. Investors want to get their big return more quickly than that!
The Theranos idea is a good one and, in some form, will probably work eventually.
Registered user
Embarcadero Oaks/Leland
on Dec 8, 2022 at 11:25 am
Registered user
on Dec 8, 2022 at 11:25 am
"The jury verdict in the Balwani case was significantly harsher than that in the Holmes case. The Holmes jury convicted her of four counts of wire fraud and conspiracy against investors, ....
Balwani, by contrast, was convicted of all 12 of the charges brought against him."
He lacked Holmes' massive well-funded PR efforts and couldn't twice play the "Mommy Anchor Baby" leniency card to play on the judge and jury's sympathies.
Looking forward to their heart-rending claims that they're both too broke to pay restitution because their PR and Legal teams are working pro bono!
Registered user
Another Palo Alto neighborhood
on Dec 8, 2022 at 11:36 am
Registered user
on Dec 8, 2022 at 11:36 am
If you are going into invest in technology (any technology), do your due diligence. Make sure you understand the patents--because THAT is the business. There was never anything usable in those patents. Anyone who did their homework (or hired an expert) and looked at the publicly available patents understood that early on. Important things are happening in biotech, but understanding any business before investing is always advisable.
Nonetheless, what the Theranos executives did was reprehensible. They deserve to go to jail. Justice has been served.
Registered user
another community
on Dec 8, 2022 at 1:20 pm
Registered user
on Dec 8, 2022 at 1:20 pm
"Balwani, by contrast, was convicted on all 12 of the charges brought against him."
The jurors were smart. They heard the evidence. They're also well aware that most of these crimes are committed by men. This is a man's game. Jurors have biases and are asked to set aside they're biases, but they're human.
Balwani's 2015 text message. "I will mold you into the NEW Elizabeth." You can't un-ring the bell.
Registered user
Duveneck/St. Francis
on Dec 10, 2022 at 5:25 pm
Registered user
on Dec 10, 2022 at 5:25 pm
They should have received exactly equivalent sentences. Oh, after the fact, one blames the ither gender!? Onky when fully caught!?
- how convenient
Registered user
another community
on Dec 11, 2022 at 11:29 am
Registered user
on Dec 11, 2022 at 11:29 am
With all due respect to men (I love men), when 95 percent of prisoners are men, no further explanation needed. I don't know what drives men to commit crimes the way they do. Whether its greed, ego, testosterone, etc. it's to the detriment of society. And most of us are sick of it, regardless of gender. I call a spade a spade. The truth hurts.
Registered user
Embarcadero Oaks/Leland
on Dec 11, 2022 at 12:59 pm
Registered user
on Dec 11, 2022 at 12:59 pm
If we're going to cite statistics, something like 60% of all women prisoners are either pregnant or mothers yet Holmes twice used the fact that she's pregnant and a mother to appeal for leniency, probably calculated moves on her part and her lawyers'.
I also find it ironic that she only complained about her abuse (sexual, physical and emotional) AFTER they were accused of all the other crimes which makes one wonder why that "abuse" wasn't a problem before and why her parents did nothing to save their daughter from all those horrors.
I'm not suggesting abuse isn't GENERALLY a problem just that it seems way too convenient in Holmes' case. Her sense of entitlement and lack of empathy for her victims is sickening.
I think she's set women back decades by first depicting herself as an all-powerful female exec and then as a pitiful victim incapable of walking into the courthouse without clutching her parents' hands.
Registered user
another community
on Dec 11, 2022 at 5:03 pm
Registered user
on Dec 11, 2022 at 5:03 pm
Being pregnant or having children won't keep you out of prison. Most men and women in prison are parents because most adults are parents. That's the criminal defense attorney rhetoric, not Holmes. Defendants don't plan their own defense. That doesn't make any sense.
You can be in an abusive relationship and still be guilty of the charges.
Why don't women leave an abusive relationship? Fear and intimidation. "I'm too pretty to go to jail" isn't the rhetoric of a skilled con artist. A skilled con artist would keep her eyes and ears open and keep quiet. She'd fly under the radar.
I don't think Holmes set women back. Strong, confident women can easily succeed on their own. We've been doing it for years. Just like men.
The message that Holmes sent was get out of an abusive relationship before it's too late. And don't let a man take control of you and your company, especially for ill-gotten gains where lives are at stake.