iNDICA NEWS BUREAU-
The 13-year prison sentence of Ramesh “Sunny” Balwani, the former president of Theranos Inc. and ex-boyfriend of Elizabeth Holmes, 37, has begun. He has been convicted of defrauding investors in the failed startup that had started operations on the basis of the duo’s claims that they have a revolutionary blood-testing technology.
Balwani, 57, surrendered to the FCI Terminal Island prison in San Pedro, California, on Thursday, April 20. He was found guilty of all charges against him for his role in the collapse of the $9 billion blood-testing startup. A San Jose jury had found Balwani guilty July 2022, on 12 federal criminal fraud charges for scamming investors out of hundreds of millions of dollars in an elaborate scheme with Holmes.
Theranos was launched by Holmes in 2003. At that time she was aged 19 and had dropped out of Stanford University. Her claims about having developed a revolutionary technology that could diagnose upwards of 200 diseases with just a few drops of a patient’s blood had swayed investors in Silicon Valley in her favor.
In 2010 Balwani joined Theranos as the deputy of Homes. He became the chief operating officer of the startup and poured $15 million of his own funds into the business. Holmes and Balwani had dated for years before he joined the company, but kept their romance a secret.
Investors poured more than $900 million into Theranos, making Holmes a billionaire on paper at the company’s peak. But things began to unravel in 2015 after The Wall Street Journal exposed that Theranos was actually using traditional blood-testing machines for testing rather than its own technology. The next year, Holmes dumped Balwani both as her business partner and lover. The company shuttered in 2018, the same year both of them were indicted.
During her trial, Holmes took the stand and accused Balwani of misleading her about the effectiveness of Theranos’ technology. She also accused him of emotional and sexual abuse. All her claims were denied by Balwani.
During the trial, Balwani did not speak in his own defense. His attorneys portrayed him as a benevolent investor who became wrapped up in Holmes’ scheme while prosecutors argued that Balwani was an active participant in the fraud and he had assisted Holmes in duping investors.
Holmes was convicted in January 2022 of one charge of conspiracy and three charges of fraud for her role in the scam. She is set to report to prison next week to begin serving her 11-year sentence. Though the co-defendants and former lovers were indicted on criminal fraud charges in 2018, they were tried separately in trials that were overseen by U.S. District Judge Edward Davila.
The judge had denied the requests made by Holmes and Balwani for new trials. Throughout their respective court proceedings, both the accused maintained that they were innocent. Holmes has filed an appeal in her case with the Ninth Circuit.