San Jose, CA — Ramesh “Sunny” Balwani wasn’t responsible for Thermos Inc., and the blood test company wasn’t his idea or creation, his lawyer told a jury on Tuesday that the abolished Silicon Valley startup Began.
Elizabeth Holmes, the founder and chief executive officer, is responsible for the rise and fall of Theranos, lawyer Stephen Kazareth said in an opening statement outlining the points of Balwani’s defense.
“Sunny Balwani didn’t start Theranos, he didn’t control Theranos,” Kazareth said. “Elizabeth Holmes, not Sunny, founded Theranos and built Theranos.”
By the time Balwani joined Theranos in 2009 as president and chief operating officer, Holmes had set up a “small but sophisticated company” for six years, Kazareth said. His knowledge of the company was largely based on what his girlfriend Holmes and Theranos scientists told him, Casares said.
Ramesh “Sunny” Balwani, a former Theranos top deputy for Elizabeth Holmes, faces the charges of deceiving investors and patients about the startup’s blood testing capabilities, but he denies it.Photo: Getty Images
56-year-old Barwani faces dozens of wire frauds and plots to commit allegedly lying to investors and patients about blood test startup technology. Balwani helped run the company with Holmes from 2009 to 2016, undertook a $ 13 million loan and helped raise the company by buying $ 5 million in shares. Evidence of the incident shows that the two had a romantic relationship for over a decade and were intertwined with the company’s co-leadership.
Holmes was convicted of wire fraud and conspiracy in January in another criminal trial.
Mr. Holmes and Mr. Balwani were indicted together in June 2018, but Judge Edward Davila of the U.S. District Court broke Mr. Balwani’s trial in March 2020 and requested that he appear in a separate court. I agreed to do it. Judge Davila presides over Mr. Holmes’s proceedings and oversees Mr. Balwani’s proceedings. The same assistant US prosecutor who filed Mr. Holmes’ proceedings has also filed Mr. Balwani’s proceedings.
Mr. Balwani’s trial faced a delay due to the prolonged jury trial selection, the Covid-19 pandemic, and Mr. Holmes giving birth to a boy who postponed his trial last year.
The government, like Holmes, has accused Balwani of misleading investors, business partners and patients about Theranos’ technology and its financial capabilities. Theranos claimed that a few drops of finger-stabbed blood could be used to test more than 200 health conditions. Prosecutors testified in Holmes’ trial that the company used its own equipment to test only 12 types of patients, arguing that those tests could be inaccurate. Theranos relied on off-the-shelf blood analyzers for most of its tests, both lawyers said.
Cazares said Theranos used the investor’s money as promised to set up the company. When Theranos left in May 2016, Theranos had hundreds of millions of dollars in banks, patents and hundreds of blood tests developed by Theranos scientists, Kazareth said.
“Money was there, business was there,” said Casares. And Barwani, who has invested $ 500 million in paper, left Theranos without selling his stake.
By the time Balwani left in 2016, Theranos had suffered from unreliable and inaccurate blood tests, worsening retail partnerships, unfortunate investors and regulatory scrutiny, the Wall Street Journal reports. Regulators have discovered a major flaw in the lab he supervised. The company was dissolved in 2018 following a civil lawsuit, a settlement with the Securities and Exchange Commission on fraud charges that Theranos paid fines without admitting or denying fraud, and a federal prosecution.
The government indictment alleges Mr. Balwani’s fraud at the company from 2010 to 2016. In Holmes’s trial, she described Barwani as the closest business mentor who influenced the way she runs her business, but he wasn’t the final decision maker.
The government’s opening statement provided a preview of the case, reflecting the case against Mr Holmes.
“This is a fraud case. It’s about lying and cheating to get money and property,” said Robert Reach, assistant US prosecutor. “We did this to make money from investors. He relies on Theranos to provide accurate and reliable blood tests so that he can make important medical decisions.” I did this to get money and business from paying the patient money and business. “
Reach said Balwani was responsible for what he said as a false financial forecast given to investors. Reach told investors that Balwani expects Theranos to generate $ 990 million in sales in 2015.
Cazares said Balwani accurately portrays the company’s projected revenue growth under the Walgreens Boots Alliance Inc.’s agreement to install Theranos blood testing equipment in thousands of retail pharmacies. I argued against.
Barwani was an entrepreneur, an immigrant from a farmer’s family, and became wealthy from his own success at a tech startup before working at Theranos, Kazareth said. Balwani worked as a software engineer and earned a business degree when he went to a blood testing company. He was in charge of testing at a blood testing company, even though he had no medical or testing experience.
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Cazares raised the issue with the government for indicting Balwani without reviewing a database containing all Theranos test data, including test results for 9 million patients.
Databases are a tricky problem. The government submitted a copy of Theranos’ own lab results database, but in August 2018, shortly after the government received the copy on an external hard drive, Theranos officials destroyed the entire database, the journal reports. The government later learned that the passcode needed to use the hard drive was missing.
Before Mr. Balwani’s lawyer outlined the broad stroke of his defense, Tuesday’s prosecutor described Mr. Balwani as half of a business duo who lied to deceive investors and patients from money. .. “They were all partners, including crime,” Reach said.
According to Reach, Balwani was fully involved in the lies spread by Theranos, boosted by its reduced cash reserves and unreliable technology. He said the company hadn’t made money for years and by 2013 cash had dropped to $ 6.9 million.
For some time, their fraud plans have been very successful, according to Reach. They raised hundreds of millions of dollars from investors and “brought them fame and worship.”
Reach told the jury that he would soon see an exchange of text messages shared by Balwani and Holmes in a long-standing personal relationship. Prosecutors also introduced hundreds of these messages during Mr Holmes’ trial, showing that the two worked together as chief executive officer and romantic partner for a multi-billion dollar company. ..
“They frankly explained how bad things happened inside Theranos when they were promoting Theranos as a healthcare revolution,” Leach said.
Theranos and “Sunny” Balwani Trial
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