Ex-Theranos COO Found Guilty of Fraud

On July 7, 2022, a jury convicted ex-Theranos COO, Ramesh “Sunny” Balwani, of two counts of conspiracy and 10 counts of fraud for defrauding investors and paying patients with false claims relating to the blood-testing technology start-up. This conviction follows the trial of Elizabeth Holmes, the former CEO of Theranos.

Interestingly, in Holmes’s trial, she was cleared of charges that she defrauded patients, while a jury found Balwani guilty of the same actions. Holmes testified in her defense and received a partial acquittal, while Balwani did not testify in his defense and was convicted on all counts. The difference in verdicts will likely lead to combative sentencing hearings and appeals. 

Some legal experts believe that federal prosecutors likely benefitted from trying the case against a different Theranos executive a second time, which allowed them to streamline and refine their evidence and argument, resulting in a tighter case against Balwani. Further, Balwani’s age, experience, and personality may have played a role in his conviction, as he had decades of experience working for Silicon Valley Technology tech companies and was 38 years old at the time he met Holmes, who was then an 18-year-old college student and may have received some sympathy from the jury. There was also testimony that he was difficult to work with, creating an unsympathetic defendant. 

His conviction on all counts and refusal to accept responsibility for the fraud may result in a tough prison sentence, and it will likely be longer than Holmes’s sentence. But Balwani’s lawyers are already teeing up for an appeal, including on evidentiary and jury instructions issues. What is clear is that this saga will continue to play out for the foreseeable future. 

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with federal criminal and civil investigations.  If you need assistance with such a matter, please contact us today.