Former Theranos exec Ramesh 'Sunny' Balwani sentenced to nearly 13 years in prison
SAN JOSE -- Ramesh "Sunny" Balwani, who along with former lover and business partner Elizabeth Holmes, swindled investors out of millions peddling bogus Theranos blood-testing technology, was sentenced Wednesday to just under years in prison.
After a morning-long sentencing hearing, U.S. District Judge Edward Davila determined Balwani's conviction called for federal prison sentence ranging from 11 years, 3 months -- the prison term given to Holmes last month -- to 14 years.
Prosecutor Jeff Schenk asked Davila to sentence Balwani to the maximum because "white collar crime can and should be deterred."
Meanwhile, Balwani's attorney, Jeff Coopersmith, asked the judge for leniency saying -- "this is obviously a decision that affects a real human being."
Unlike Holmes, who made a tearful plea to the judge, Balwani did not speak on his own behalf.
In the end, Davila decided on sentencing Balwani to 12 years and 11 months in prison with 3 years supervised release. He will be required to surrender on March 15th of next year.
Balwani was convicted in July of fraud and conspiracy, and his sentencing comes less than three weeks after Holmes, the company's founder and CEO, received more than 11 years in prison for her role in the scheme.
"Patient health is the highest priority of our healthcare system, and Silicon Valley has long been home to healthcare start-ups that enhance the care of patients through technological developments," said U.S. Attorney Stephanie M. Hinds said after the sentencing. "Ramesh Balwani, in a desire to become a Silicon Valley titan, valued business success and personal wealth far more than patient safety. He chose deceit over candor with patients in need of medical care, and he treated his investors no better. Today's sentence should serve as a lesson to anyone considering fraud in their own push for success."
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.
The scam duped investors out of millions and endangered the health of countless patients.
It also threw a bright light on Silicon Valley's dark side, exposing how its culture of hype and boundless ambition could veer into lies.
While on the witness stand in her trial, Holmes accused Balwani, 57, of manipulating her through years of emotional and sexual abuse. Balwani's attorney has denied the allegations.
The pair were romantically involved until a bitter split in 2016.
The two trials had somewhat different outcomes. Unlike Balwani, Holmes was acquitted on several charges of defrauding and conspiring against people who paid for Theranos blood tests that produced misleading results and could have pointed patients toward the wrong treatment. The jury in Holmes' trial also deadlocked on three charges.
Balwani was convicted on all 12 felony counts, and his lawyers contend he deserved a far more lenient sentence of just four to 10 months in prison, preferably in home confinement. Prosecutors for the Justice Department sought 15 years. A probation report recommended nine years.
Duncan Levin, a former federal prosecutor who is now a defense attorney, described Balwani's bid for a light sentence as "utterly unrealistic."
Levin suspects the judge may give greater weight to the Justice Department and the probation office recommendations, which mirror the sentences those agencies sought for Holmes.
The judge ultimately gave her 11 1/4 years in prison and recommended that the sentence be served in a low-security facility in Byran, Texas.
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 the 38-year-old 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 in glowing magazine articles that likened her to Silicon Valley visionaries such as Apple co-founder Steve Jobs.
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.
"Mr. Balwani is not the same as Elizabeth Holmes," his lawyers wrote in a pre-sentencing 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 had 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."