Balwani had no reaction as the verdict was read in U.S. District Court in San Jose, California, and he looked at Judge Edward Davila. Baluani’s family members could be seen consoling him, while his two brothers were by his side. Jurors deliberated for five days. Balwani, 57, sat masked next to his defense lawyers and shifted in his seat as the judge considered the verdict. Jurors heard from 24 government witnesses, who painted Balwani as Holmes’ accomplice. Balwani’s sentencing date has not yet been set. Each count of wire fraud carries a maximum sentence of 20 years in prison, and the conspiracy count carries up to five years. Legal experts expect Balwani to appeal. The trial began on March 22 and experienced several delays due to the pandemic. Jurors heard from 24 government witnesses who painted Balwani as an accomplice of his ex-girlfriend and Theranos CEO Holmes. Prosecutors alleged that Balwani conspired with Holmes in a decade-long scheme to siphon hundreds of millions of dollars from investors and patients in an effort to keep the struggling company afloat. According to prosecutors, Balwani oversaw Theranos’ wildly inflated financial projects, lab operations and a doomed Walgreens deal. Theranos promised to revolutionize blood tests by making them cheaper, faster and less painful than traditional lab tests. “Balwani is not a victim,” Assistant U.S. Attorney Jeffrey Schenck said in closing arguments. “He is a fraudster… Mr. Balwani knows that the biggest threat to fraud is the truth.” Balwani’s legal team called two witnesses: an Arizona doctor who used Theranos blood analyzers and an information technology consultant who testified about a missing database, the Laboratory Information System, that contained patient test results. Balwani, unlike Holmes, did not testify in his own defense. In January, a separate jury found Holmes guilty of three counts of criminal fraud and one count of conspiracy to commit investor fraud. The jury acquitted her of charges related to defrauding Theranos patients. Holmes remains on bail pending sentencing in September. The former Silicon Valley executives raised nearly $1 billion from powerful investors including media mogul Rupert Murdoch, Oracle co-founder Larry Ellison, Silicon Valley investor Don Lucas, Walmart’s Walton family and the family of former Secretary Education Betsy DeVos. Holmes and Balwani also attracted notable names to their board, including former Secretary of Defense James Mattis, former Secretary of State Henry Kissinger and former Senator Sam Nunn. At its peak, Theranos was valued at over $9 billion, and Balwani’s stake was worth $500 million. In a marathon 12-hour closing argument spanning three days, Balwani’s legal team blasted the government’s witnesses and called their case “incomplete”. “Mr. Balwani put his heart and soul into Theranos, working tirelessly year after year to make the company a success,” said Jeffrey Coopersmith, Balwani’s defense attorney, later adding, “the government has not proven that the Mr. Balwani attempted to deceive or defraud anyone.’ Coopersmith asked the jury to consider why prosecutors did not call certain employees, investors and board members to the stand, including four members of the DeVos family who invested in Theranos. “They invested $100 million,” Coopersmith said. “You’d think they’d be bothered to come and testify, but we’ve had no news.” Lisa Peterson, the DeVos family’s estate manager, testified at the trial on behalf of the family. Balwani’s lawyers argued that he acted in good faith and truly believed in the potential of the blood-testing technology, but former employees told CNBC that Balwani was aware of the problems and created a toxic environment at Theranos. In a July 2015 text message previously obtained by CNBC and read aloud in court by the government, Balwani wrote to Holmes: “I am responsible for everything at Theranos. It was all my decisions.” “He acknowledges his role in the fraud,” Schenk said, referring to the text message. Correction: Story title updated to reflect that Balwani is Theranos’ COO.
