What was top Theranos executive ‘Sunny’ Balwani convicted of?
Thernos CEO Elizabeth Holmes’ romantic and business partner Sunny Balwani has been convicted of fraud. How long will he be in prison?
Ramesh ‘Sunny’ Balwani, the romantic and business partner of Thernos CEO Elizabeth Holmes has been sentenced to twenty years in prison for his role in the fraudulent blood business. Balwani has been convicted on twelve counts related to fraud whereas Holmes was only found guilty on four of eleven counts.
Balwani met Holmes when she was a eighteen and a student at Harvard; he was nineteen years her senior. Their romantic relationship was not disclosed to investors and many see the couple as coconspirators in the Thernos scheme.
Balwani served as the president and chief operating officer of Theranos from 2009 to 2016. When the federal government began to investigate the Thernos, Balwani soon left his post. This move was not enough to separate his legacy from the fraudulent past of the silicon valley firm.
The Securities and Exchange Committee (SEC) charged Balwani and Holmes with securities fraud in March 2018. After the filing was made by the SEC, the agency announced that the charges were brought against the two for “raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.”
What really sealed the government’s case was that Thernos told potential investors that their products were being used by the “U.S. Department of Defense (DoD) on the battlefield in Afghanistan.” Holmes and Balwani said that the use by DoD “would generate more than $100 million in revenue in 2014.” However, the products were never deployed by the Defense Department and overall the company only generated around $100,000 that year.
Balwani denied wrongdoing in the case, but as since been convicted.
Charges brought by the San Francisco District Attorney
In addition to the charges brought forward by the SEC, the U.S. District Attonrney in San Fransisco also conducted an invesetigation.
Back in June 2018, the U.S. Attorney’s Office concluded an investigation and a grand jury indicted the couple on several counts of wire fraud, as well as, two counts on conspiracy to commit wire fraud.
The more recent trial wrapped up on 7 July, and Balwani was found guilty on all nine counts and faces up to twenty years in prison. Balwani could also be forced to pay millions in restitution. His sentencing date will take place in the coming weeks at which point we will know how much time he will spend behind bars for his part the criminal scheme.
Balwani and Holmes were not only accused of misleading investors but also paitents who paid to have their blood tested on Thernos machines. Lawyers representing the former Thernos Presidnet have denied his guilt in all related crimes.