Former Theranos exec Ramesh "Sunny" Balwani sentenced to nearly 13 years
The former chief operating officer of disgraced biotech startup Theranos has been sentenced to 12 years and 10 months in prison.
Judge Edward Davila of the Northern District of California sentenced Ramesh "Sunny" Balwani to 155 months in prison and three years of probation. Balwani, 57, must surrender himself on March 15, Davila ruled.
Balwani was Theranos' chief operating officer for six years, during which time he also maintained a romantic relationship with Holmes. He was convicted in July of 12 counts of fraud and conspiracy for his role in the company, which fraudulently claimed it developed a medical device that could scan for hundreds of diseases with a few drops of blood.
Balwani convicted of 12 felony counts
Prosecutors had asked for Balwani to serve 15 years in prison. Balwani's defense team had asked for probation only, arguing that he had invested his own money into Theranos and lost it all.
Balwani did not speak at his sentencing hearing in San Jose, which stretched over four hours. He intends to appeal the sentence, his attorney told reporters.
The sentencing comes less than three weeks after Elizabeth Holmes, the company's founder and CEO, received more than 11 years in prison for her role in the scheme. The scandal revolved around the company's false claims to have developed a medical device that could scan for hundreds of diseases and other potential problems with just a few drops of blood taken with a finger prick.
On the stand, Holmes described her relationship with Balwani as controlling, and said Balwani manipulated her through years of emotional and sexual abuse. Balwani's attorney has denied the allegations.
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While Balwani was convicted of all 12 felony counts, Holmes was convicted of just four. The jury acquitted her of several charges of defrauding and conspiring against people who paid for Theranos blood tests that produced misleading results. The jury in Holmes' trial also deadlocked on three charges.
Balwani's trial was sparsely attended, and on Wednesday no one was in line an hour before the courthouse opened to attend his sentence. That's a sharp contrast to the queue that began to form five hours before the doors opened at Holmes' November 18 sentencing.
Portrait of hardworking immigrant
In court documents, Balwani's lawyers painted him as a hardworking immigrant who moved from India to the U.S. during the 1980s to become the first member of his family to attend college. He graduated from the University of Texas in 1990 with a degree in information systems.
He later moved to Silicon Valley, where he first worked as a computer programmer for Microsoft before founding an online startup that he sold for millions of dollars during the dot-com boom of the 1990s.
Balwani and Holmes met around the same time she dropped out of Stanford University to start Theranos in 2003. He became enthralled with her and her quest to revolutionize health care.
Balwani's lawyers said he eventually invested about $5 million in a stake in Theranos that eventually became worth about $500 million on paper — a fraction of Holmes' one-time fortune of of $4.5 billion.
That wealth evaporated after Theranos began to unravel in 2015 amid revelations that its blood-testing technology never worked as Holmes had boasted. Before Theranos' downfall, Holmes teamed up with Balwani to raise nearly $1 billion from deep-pocketed investors that included software mogul Larry Ellison and media magnate Rupert Murdoch.
"Not the same as Elizabeth"
"Mr. Balwani is not the same as Elizabeth Holmes," his lawyers wrote in a memo to the judge. "He actually invested millions of dollars of his own money; he never sought fame or recognition; and he has a long history of quietly giving to those less fortunate." Balwani's lawyers also asserted that Holmes "was dramatically more culpable" for the Theranos fraud.
Echoing similar claims made by Holmes's lawyers before her sentencing, Balwani's attorneys also argued that he has been adequately punished by the intense media coverage of Theranos, which has been the subject of a book, documentary and award-winning TV series.
Balwani "has lost his career, his reputation and his ability to meaningfully work again," his lawyers wrote.
Federal prosecutors cast Balwani as a ruthless, power-hungry accomplice in crimes that ripped off investors and imperiled people who received flawed results. The blood tests were to be available in a partnership with Walgreen's that Balwani helped engineer.
"Balwani presented a fake story about Theranos' technology and financial stability day after day in meeting after meeting," the prosecutors wrote in their memo to the judge. "Balwani maintained this façade of accomplishments, after making the calculated decision that honesty would destroy Theranos."