SAN JOSE, California. – In the latest chapter of Theranos saga, Ramesh “Sunny” Balwani, the company’s former chief operating officer and former boyfriend of its founder Elizabeth Holmes, was found guilty of all 12 criminal fraud charges.
Balwani did not react when the verdict was read in the U.S. District Court in San Jose, California, and stared straight ahead at Judge Edward Davila. The members of the Balwani family were seen comforting him, and his two brothers were by his side.
The jury also found Balvani guilty on charges of patients, which cannot be said about Holmes’ verdict.
Judge Davila has set Balwani’s sentencing date for November. 15, and increased bail to $750,000. He will remain on probation until he is sentenced. Balwani and his legal team left the courthouse without answering questions.
The jury deliberated for five days. Balwani, 57, sat next to his lawyers, wearing a mask, fidgeting in his seat as the judge reviewed the verdict.
The jury heard 24 government witnesses who presented Balwani as an accomplice of Holmes.
Balwani’s sentencing date has not yet been set. The maximum penalty for each count of wire fraud is 20 years in prison, and in the case of conspiracy, a maximum of five years. Lawyers expect Balwani to appeal.
trial has begun March 22 and faced several delays due to the pandemic. The jury heard 24 government witnesses who presented Balwani as an accomplice to his ex-girlfriend and Theranos CEO Holmes.
Prosecutors alleged Balwani colluded with Holmes in a decade-long scheme to swindle hundreds of millions of dollars from investors and patients to keep the struggling company afloat. Balwani oversaw massively bloated Theranos financial projects, lab operations and a doomed deal with Walgreens, prosecutors said. Theranos has promised to revolutionize blood testing by making it cheaper, faster and less painful than traditional lab tests.
“Balwani is not a victim,” Assistant U.S. Attorney Jeffrey Schenk said in his closing remarks. “He is the perpetrator of the fraud… 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 the missing database, the Laboratory Information System, that contained patient test results. Balwani, unlike Holmes, did not testify in his defense.
In January, a separate jury found Holmes guilty three counts of wire fraud and one count of conspiracy to commit wire fraud against investors. The jury acquitted her of Theranos patient fraud charges. Holmes remains on bail until she awaiting sentencing in September.
Former Silicon Valley executives have raised almost $1 billion from high-profile investors, including the media mogul. Rupert MurdochOracle co-founder Larry Ellison, Silicon Valley investor Don Lucas, the Walton family of Walmart, and the family of a former education secretary Betsy DeVos.
Holmes and Balwani also brought high-profile people to their board of directors, including a former secretary of defense. James Mattisformer Secretary of State Henry Kissinger and former Senator Sam Nunn. At its peak, Theranos was valued at over $9 billion, while Balwani’s stake was valued at $500 million.
In a marathon 12-hour closing argument that lasted more than three days, Balwani’s legal team slammed government witnesses and called their case “incomplete.”
“Mr. Balwani put his heart and soul into Theranos, he worked tirelessly year after year to make the company a success,” said Jeffrey Coopersmith, Balwani’s attorney, who later added: “The government has not proven that Mr. Balwani was trying to defraud or deceive someone.
Coopersmith asked jurors to consider why prosecutors did not call certain employees, investors and board members, including four members of the DeVos family who invested in Theranos, to the podium.
“They invested $100 million,” Coopersmith said. “You might have thought that it wouldn’t hurt them to come to testify, but we haven’t heard anything from them.” Lisa Peterson, manager of the DeVos family’s wealth, testified in court on behalf of the family.
Balwani’s lawyers argued that he acted in good faith and sincerely believed in the capabilities of blood test technology, but former employees told CNBC that Balwani was aware of the problems and created a toxic environment in Theranos.
In a text message from July 2015 earlier received by CNBC and read aloud in court by the government, Balwani wrote to Holmes: “I am responsible for everything in Theranos. All decisions were mine too.
“He admits his role in the scam,” Schenk said, referring to the text message.
Jill Silvestri of CNBC contributed to this report.
Correction: The heading of the article has been updated to reflect that Balwani is the COO of Theranos.