Comment Former Theranos executive Ramesh “Sunny” Balwani, who long served as founder Elizabeth Holmes’ second-in-command, was convicted on all 12 counts in San Jose federal court of defrauding investors and patients connected to the biotech company , according to the Associated Press. Balwani faced 10 counts of wire fraud and two counts of conspiracy to commit wire fraud after initially being charged with his former partner, Holmes. Balwani ended up in the toughest crisis – Holmes was convicted in January of four counts of fraud for misleading investors who funneled capital into the blood-testing start-up that once promised to transform the medical diagnostics industry. Theranos founder Elizabeth Holmes found guilty in Silicon Valley fraud case Theranos has been a shining star in Silicon Valley for more than a decade, attracting investment from tech savvy like Oracle’s Larry Ellison and venture capitalist Tim Draper. It had a star-studded board that included former Defense Secretary Jim Mattis and former Secretaries of State Henry Kissinger and George Shultz. Holmes had started the company while still a student at Stanford and captivated potential business partners, investors and the media with her vision of making blood tests cheaper and less painful. But the house of cards came crashing down after a Wall Street Journal investigation revealed that Theranos’ technology didn’t work as well as the company boasted. Its small, tabletop device — sometimes called the Edison or MiniLab — could only run about a dozen blood tests, former employees revealed in testimony during the trials — a far cry from the hundreds of tests Theranos suggested it could complete. The company’s collapse destroyed Holmes’ image as a trailblazing Silicon Valley innovator, and he became the subject of a best-selling book, several podcasts, an HBO documentary and, most recently, a Hulu series starring Amanda Seyfried. Thearanos’ downfall shook confidence in some corners of the biotech industry and served, for some, as another example of Silicon Valley greed overrun. Elizabeth Holmes learned all the wrong lessons from Silicon Valley Balwani, a man nearly 20 years older than Holmes, was by her side many times, both as a business and romantic partner. Federal prosecutors charged the two together, but the defendants later dropped their cases when Holmes accused Balwani of abusing her. He has denied the charges. The allegations did not come up during Balwani’s trial. But the trial mirrors Holmes’ trial in many ways, with prosecutors calling more than a dozen of the same witnesses, including former investors and the company’s lab managers. But Balwani ended up with more convictions than Holmes, which was not entirely unusual because the two had different juries, said Robert Dugdale, a former federal prosecutor who is a partner at Kendall Brill & Kelly and specializes in defense. Different juries might look at the same set of facts and come up with slightly different findings, he said, noting that both Holmes and Balwani were convicted of at least some of the charges. “Judges don’t reach completely consistent results sometimes,” he said. “It’s not unusual for there to be slight discrepancies.” The government had also restated its case a second time, said Michael Weinstein, chair of the white-collar criminal practice at Cole Schotz and a former federal prosecutor. Prosecutors had skimped on evidence, were more selective with their witnesses and their presentation was more rigorous, he said. “In the end, it was too much for the court not to convict,” he said. He added that Balwani, an older and more experienced entrepreneur, might not have garnered the same “likes” as Holmes, who started working at Theranos as a student. Although a less publicized leader, Balwani had significant responsibilities within the company, including managing the biotech’s doomed relationship with Walgreens, overseeing its labs and overseeing some of its finances and investor relations, the company revealed. test. Prosecutors said Balwani was well aware of the issues facing Theranos and dismissed the employee’s concerns. A former lab worker who said she brought her concerns to Balwani, Erika Cheung, later became a key whistleblower to expose the company. “What he’s saying to Erika Cheung is that he’s questioning her experience and he’s tired of people who don’t have enough experience questioning the Theranos blood test,” prosecutor Jeff Schenk said in his closing statement. “And he tells her that he has a job at Theranos, and that’s to process patient samples and not ask questions.” Balwani’s defense team did not dispute that the former executive had a great deal of control and responsibility at Thiranos. “He was drinking from multiple, multiple fire hoses,” including labs, software, investors and manufacturing, his defense attorney Jeffrey Coopersmith told the court. But his defense team argued that Balwani believed in Theranos and — as Holmes said — acted on the belief that Theranos was doing what it could to make blood tests more affordable. “What the evidence in this case showed was that, at all times, Mr. Balwani acted in good faith to make blood tests more affordable, more convenient and more accessible to everyone,” Coopersmith said in his closing statement. . Unlike Holmes, who testified over several days, Balwani did not take the stand during his trial. His team called only two witnesses, including a physician who referred patients to Theranos and a computer expert unaffiliated with the company who spoke about a lost database of test results. The Elizabeth Holmes trial is the hottest ticket in Silicon Valley Balwani, a former dot-com software entrepreneur, guaranteed a $10 million loan for Theranos in 2009 and later bought millions of dollars worth of company stock. In 2009, he became vice chairman of Theranos and was subsequently named president and chief operating officer. He first met an 18-year-old Holmes on an international trip to China the summer before she started college. Balwani was 37 at the time. The pair later struck up a romantic relationship and continued dating while working at the start-up. In a statement, Balwani’s lawyer said he was “disappointed” by the verdicts. “We intend to study and consider all of Mr. Balwani’s options, including an appeal,” Coopersmith said. Holmes is expected to be sentenced in September and Balwani in November. “Mr. Balwani had a choice to make,” Schenck, the prosecutor, said in his closing statement. “He could see Theranos fail, he could see his girlfriend’s business collapse, or he could follow a different path”.
