SAN JOSE, Calif. – In the latest chapter of the Theranos saga, Ramesh “Sunny” Balwani, former chief operating officer and ex-boyfriend of founder Elizabeth Holmes, has been found guilty on all 12 counts of fraud.
Balwani didn’t respond as the verdict was read in US District Court in San Jose, California, staring straight ahead at Judge Edward Davila. Balwani’s family members could be seen comforting him and his two brothers were by his side.
The jury also found Balwani guilty on patient charges, which was not the case with Holmes’ verdict.
The court scheduled its sentencing hearing for November 15, changing its $500,000 unsecured bond to a $750,000 secured bond. Balwani and his legal team left the courthouse without answering questions.
“We are obviously disappointed with the verdicts. We plan to review and weigh all of Mr Balwani’s options, including an appeal,” Balwani’s attorney, Jeffrey Coopersmith, said in a statement.
The jury deliberated for five days. Balwani, 57, sat masked next to his defense attorneys and moved in his seat while the trial judge reviewed the verdict.
The jury heard from 24 government witnesses who accused Balwani of being an accomplice to his ex-girlfriend and Theranos CEO, Holmes
Each wire fraud charge carries a maximum sentence of 20 years in prison and the conspiracy charge carries a maximum sentence of five years. Legal experts assume that Balwani will appeal.
The process began on March 22nd and has experienced several delays due to the pandemic.
Prosecutors claimed Balwani conspired with Holmes in a decades-long plot to extort hundreds of millions of dollars from investors and patients to keep the ailing company afloat. According to prosecutors, Balwani oversaw Theranos’ bloated financial projects, lab operations, and a doomed Walgreens deal. Theranos had promised to revolutionize blood tests by making them cheaper, faster, and less painful than traditional lab tests.
“Balwani is not a victim,” Assistant US Attorney Jeffrey Schenk said in his closing argument. “He is a perpetrator of fraud. … Mr. Balwani knows that the greatest threat to fraud is the truth.”
Balwani’s legal team called two witnesses: an Arizona doctor who used Theranos blood analyzers and an IT consultant who testified about a missing database, the Laboratory Information System, of patients’ test results. Unlike Holmes, Balwani did not testify in his own defense.
In January, a separate jury found Holmes guilty of three counts of criminal wire fraud and one count of conspiracy to commit wire fraud against investors. The jury acquitted her of cheating on Theranos patients. Holmes remains on bail while awaiting her sentencing in September.
The former Silicon Valley executives raised nearly $1 billion from powerful investors including media mogul Rupert Murdoch, Oracle co-founder Larry Ellison, Silicon Valley investor Don Lucas, Walmart’s Walton family and the family of former Secretary of Education Betsy DeVos.
Holmes and Balwani also brought notable names to the company’s board, including former Secretary of Defense James Mattis, former Secretary of State Henry Kissinger and former Senator Sam Nunn. At its peak, Theranos was valued at over $9 billion and Balwani’s stake was worth $500 million.
In a 12-hour closing argument spanning three days, Balwani’s legal team blasted government witnesses and called prosecutors’ case “incomplete”.
“Mr. Balwani put his heart and soul into Theranos, he has worked tirelessly year after year to make the company a success,” Coopersmith said, adding, “The Government has not proven that Mr. Balwani was trying to kill anyone.” to deceive or to cheat.”
Coopersmith asked the jury to consider why prosecutors did not call certain employees, investors and board members to the witness stand, including four members of the DeVos family who invested in Theranos.
“They invested $100 million,” Coopersmith said. “You’d think they’d bother coming to testify, but we haven’t heard from them.” Lisa Peterson, the DeVos family wealth manager, testified on the family’s behalf at the trial.
Balwani’s attorneys argued that he acted in good faith and truly believed in the potential of blood testing technology, but former employees told CNBC that he was aware of the issues and had created a toxic environment on Theranos.
In a July 2015 text message, previously obtained by CNBC and read by the government in court, Balwani wrote to Holmes: “I am responsible for everything about Theranos.
“He acknowledges his role in the scam,” Schenk said, referring to the text message.
CNBC’s Jill Silvestri contributed to this report.
Correction: Updated the story title to reflect that Balwani is the COO of Theranos.