July 18, 2024
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Theranos: Sunny Balwani bags jail time

A court sitting in California has sentenced Ramesh ‘Sunny’ Balwani, an executive of the failed startup, Theranos to a prison sentence of nearly 13 years.

For his part in Theranos, the court found Balwani guilty of twelve counts of wire fraud as well as the conspiracy to commit wire fraud.

Executives at Theranos said that the product could diagnose diseases with a few droplets of blood from a finger prick. This was not true.

Last month, Holmes was given a prison sentence of over 11 years (135 months).

At the end of a nearly four-hour hearing the court handed Balwani a prison sentence of 155 months . He did not say anything. Like Holmes, his lawyers say he plans to file an appeal.

He was found guilty, unlike Holmes, of cheating people who used blood tests. The court found Holmes guilty of fraud on four counts.

Holmes started Theranos after she drooped out of Stanford University at age 19 and was called “the next Steve Jobs.” After it said it could change how diseases are diagnosed, the company’s value skyrocketed.

Who is ‘Sunny’ Balwani?

Balwani, who used to be the company’s president and chief operating officer (COO), was her second in command and was in charge of the company’s labs.

Even though they initially charged the two together, they has separate trials. Holmes said that Balwani had hurt him emotionally and physically while dating. She said that the way he allegedly used her was controlling and made her make bad business decisions.

Balwani, who is 19 years older than her, has said that these claims are not valid.

The San Jose court sentenced Balwani, the same court that sentenced Holmes.

Compared to Holmes’ trial, Balwani’s was not as well attended. People lined up five hours before the court opened on November 18 for her sentencing, but there was no line to see him.

Theranos short lived success

During her stint at Stanford University in 2002, she made a patch that could check for infections and release antibiotics as needed.

A few months later, Holmes quit Stanford at 19 and started Theranos. This time, he devised a revolutionary way to test blood with a finger prick.

Powerful and influential people invested in the startup without seeing audited financial statements.

Some of her supporters were US Treasury Secretary George Schultz, media mogul Rupert Murdoch, and the Waltons, the wealthiest family in the US.

The help and the way she acted gave her more credibility.

It started to fall apart in 2015 when a “whistleblower” spoke up about problems with the Edison, the company’s best-known testing device. Then, the Wall Street Journal wrote a series of articles that said the results weren’t reliable and that the company had done most of its testing with machines already on the market and made by other companies.

As lawsuits piled up, Holmes’ partners cut ties with him. And in 2016, US officials told him he couldn’t run a blood-testing service for two years.

In 2018, Theranos went out of business.

In March that year, Holmes paid $700 million to settle civil charges that she had lied to investors.

But three months later, police arrested Ms. Homes and Mr. Balwani on charges of wire fraud and plotting to commit wire fraud.

Read Also: Who is Elizabeth Holmes, and why is she on trial? 

Prosecutors said she lied to patients about the tests and lied to investors about how well the company was doing.

As the trial for the Theranos scandal got closer, people said it was amazing how much Holmes stuck to her original story. The people familiar with her said they didn’t think she had changed.

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