Ex-Theranos president Balwani gets 13-year prison term in fraud case
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Ramesh “Sunny” Balwani chose to remain silent rather than make a statement to the judge before he was sentenced.
PHOTO: REUTERS
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SAN JOSE, California – Former Theranos president Ramesh “Sunny” Balwani was sentenced to 13 years in prison for defrauding investors and patients of Theranos,
The sentence imposed on Wednesday by US District Judge Edward Davila in San Jose, California, is far closer to the 15-year term prosecutors asked for than what Balwani’s lawyers sought – home detention or supervised release on probation.
Judge Davila in November ordered Holmes to serve 11-1/4 years in prison.
As he did with Holmes, the judge said he would decide later how much restitution Balwani must pay. The government has asked for both to be ordered to pay about US$800 million (S$1.1 billion).
Balwani, 57, chose to remain silent rather than make a statement to the judge before he was sentenced. He sat still showing no emotion as his prison term was announced. Family members sitting behind him in court did not react either.
Balwani and Holmes, who had a romantic relationship while they worked together, were tried and convicted separately of lying about the accuracy and capabilities of Theranos’ blood-testing machines. The pair promised to revolutionise the medical industry by using a few drops of blood to complete a wide array of health tests.
As problems came to light, the company, once valued at US$9 billion, fell apart amid regulatory crackdowns and shareholder lawsuits.
The collapse of the startup and the indictment of Holmes, a Stanford University dropout who became a celebrity Silicon Valley entrepreneur, spawned books, a documentary and a television series. Holmes was convicted of defrauding investors in January, while a jury found Balwani guilty in July.
“The defendants chose to go forward and continue with deception, misleading information, active misleading, and continued to perpetuate the fraud” even after they knew Theranos machines were a failure, the judge said before he issued Balwani’s sentence.
The sentence imposed by Davila reflects, in part, how he viewed Balwani’s role in the fraud. While Holmes was acquitted of charges that she defrauded patients, Balwani was convicted on those counts.
Prosecutors argued Balwani’s conviction merits a higher sentence because he knowingly provided patients with inaccurate and unreliable blood tests.
Balwani had “significant autonomy in running the lab” at Theranos, prosecutor Jeffrey Schenk told the judge at Wednesday’s hearing. He was in charge of hiring for the lab and its data management, he added. “It is in the lab that some of the greatest harm occurred.”
Balwani’s lawyers aimed to distinguish him from Holmes in their plea for leniency. Balwani never sought fame or recognition, and has a long history of giving to charity, his lawyer, Mr Jeffrey Coopersmith, argued.
In his late fifties, Balwani won’t get “another crack at a company like Theranos”, Mr Coopersmith said. “He’s unfortunately radioactive as a result of this whole affair.”
“Ramesh Balwani, in a desire to become a Silicon Valley titan, valued business success and personal wealth far more than patient safety,” Ms Stephanie Hinds, the US attorney in San Francisco, said in a statement. “He chose deceit over candour with patients in need of medical care, and he treated his investors no better.” BLOOMBERG
