Former Theranos President and Chief Operating Officer Ramesh “Sunny” Balwani was sentenced to 13 years in prison for defrauding buyers and sufferers of Theranos Inc., the blood-testing startup he ran alongside its founder and chief government officer Elizabeth Holmes.
The sentence imposed Wednesday by US District Judge Edward Davila in San Jose, California, is much nearer to the 15-year term prosecutors requested for than what Balwani’s legal professionals sought — house detention or supervised launch on probation. Davila final month ordered Holmes to serve 11 1/4 years in prison.
As he did with Holmes, the decide mentioned he’ll resolve later how a lot restitution Balwani should pay. The authorities has requested for each to be ordered to pay about $800 million.
Balwani, 57, selected to stay silent quite than make a press release to the decide earlier than he was sentenced. He sat nonetheless displaying no emotion as his prison term was introduced. Family members sitting behind him in courtroom didn’t react both.
“We are disappointed with the outcome,” his legal professional, Jeffrey Coopersmith, mentioned in a press release. “We respectfully disagree and plan to appeal.”
Ramesh “Sunny” Balwani
Balwani and Holmes, who had a romantic relationship whereas they labored collectively, have been tried and convicted individually of mendacity concerning the accuracy and capabilities of Theranos’s blood-testing machines. The pair promised to revolutionize the medical trade through the use of just a few drops of blood to finish a wide selection of well being assessments.
As issues got here to mild, the corporate as soon as valued at $9 billion fell aside amid regulatory crackdowns and shareholder lawsuits. The collapse of the startup and the indictment of Holmes, a Stanford University dropout who turned a star Silicon Valley entrepreneur, spawned books, a documentary and a tv sequence. Holmes was convicted of defrauding buyers in January, whereas a jury discovered Balwani responsible 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 have been a failure, the decide mentioned earlier than he issued Balwani’s sentence.
The sentence imposed by Davila displays, in half, how he considered Balwani’s position in the fraud. While Holmes was acquitted of expenses she defrauded sufferers, Balwani was convicted on these counts.
Prosecutors argued Balwani’s conviction on the affected person counts deserves a better sentence as a result of he knowingly offered sufferers with inaccurate and unreliable blood assessments.
Balwani had “significant autonomy in running the lab” at Theranos, prosecutor Jeffrey Schenk advised the decide at Wednesday’s listening to. He was in cost of hiring for the lab and its information administration, he added. “It is in the lab that some of the greatest harm occurred.”
Balwani’s legal professionals aimed to differentiate him from Holmes in their plea for leniency. Balwani by no means sought fame or recognition, and has an extended historical past of giving to charity, Coopersmith argued.
In his late fifties, Balwani gained’t get “another crack at a company like Theranos,” Coopersmith mentioned. “He’s unfortunately radioactive as a result of this whole affair.”
Davila mentioned he’ll assist Coopersmith’s suggestion that Balwani serve his time on the minimum-security prison in Lompoc, California. The US Bureau of Prisons makes remaining choices on inmate assignments.
“Ramesh Balwani, in a desire to become a Silicon Valley titan, valued business success and personal wealth far more than patient safety,” Stephanie Hinds, the US Attorney in San Francisco, mentioned in a press release. “He chose deceit over candor with patients in need of medical care, and he treated his investors no better.”
The case is U.S. v. Balwani, 18-cr-00258, US District Court, Northern District of California (San Jose).
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