In 2003, Theranos, a Silicon Valley startup, made a promise that would revolutionize the world of medicine: With just a few drops of blood, it could provide complete diagnoses to patients, from diabetes to cancer. A simple idea born of a 19yearold girl’s fear of needles was worth $9 billion and catapulted the girl’s name into one of the most promising in the business world.
Nearly 20 years later, she and her righthand man are responsible for embezzlement, multiple allegations of fraud, and starring in one of the most symptomatic downfalls of the age of influence and technology.
The founder, Elizabeth Holmes, now 37, is still awaiting sentencing, scheduled for September this year, according to The New York Times. In January, she was convicted of four of the 11 charges against her on US soil.
Her righthand man and former lover, Ramesh Balwani, 57, has just been found guilty of 12 counts of fraud against him and faces 20 years in prison plus a $250,000 payment for each.
Balwani, also known as Sunny, was Therano’s COO and has been accused of defrauding patients and investors, as well as conspiracy and wire fraud. According to The New York Times, the executive is due to be sentenced in November.
“We are obviously disappointed with the verdicts. We plan to review and evaluate all of Balwani’s options, including an appeal,” Balwani’s attorney, Jeffrey Coopersmith, said in a statement to CNN.
Holmes and Balwani met in 2002 during a summer program in Beijing to learn Mandarin. The 20yearold was already a successful entrepreneur in the software industry. They stayed in touch after that and were living together in 2005.
Sunny assumed the formal role at the company in 2009 after providing the company with a $10 million loan. Though Holmes and Balwani had a romantic relationship, they kept their relationship out of the spotlight from investors and partners, according to CNN.
The company received investment from media entrepreneur Rupert Murdoch and struck a significant partnership with Walgreens, which was valued at $9 billion.
Balwani helped Holmes maintain his image with Steve Jobs, ran the lab and helped with fundraising. Theranos raised $945 million from investors and Elizabeth was even considered the next personality in tech.
Elizabeth Holmes, CEO of Theranos, exits federal court in California in December 2021
Image: Stephen Lam/R
The autumn
In 2015, the scheme came to light through an investigation by American newspaper The Wall Street Journal, which revealed flaws in the company’s testing methods and technological capabilities.
The company reportedly performed about a dozen of the hundreds of tests it offered using its proprietary blood testing device and with questionable accuracy. Additionally, the report revealed that Theranos relied on devices made by thirdparty vendors from traditional blood testing companies, rather than its own technology.
After that, Balwani left the company, which went bankrupt in 2018. That year, he and Holmes were accused of cheating.
The two were tried separately, but played important roles on each other’s jury.
During her criminal trial, Holmes suggested that Balwani wielded even more power than she did in her own company and made allegations about their relationship as part of her defense. In the documents provided by the founder’s defense, she alleged that Sunny was a sexually and emotionally abusive man, but his defense disputes this. Despite this, none of the defendants testified against the other.