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Ex-Theranos president jailed for fraud

Former Theranos executive Ramesh “Sunny” Balwani has been jailed for nearly 13 years for his role in the company’s blood-testing hoax.

December 8, 2022
By Jody Godoy
8 December 2022

A US judge has sentenced former Theranos president Ramesh “Sunny” Balwani to 12 years and 11 months in prison on charges of defrauding investors and patients of the blood testing startup led by Elizabeth Holmes.

US District Judge Edward Davila in San Jose, California, imposed the sentence on Balwani, who was convicted by a jury on two counts of conspiracy and 10 counts of fraud in July.

Prosecutors said Balwani, 57, conspired with Holmes, 38, to deceive Silicon Valley investors into believing the company had achieved miniaturised machines that could accurately run a broad array of medical diagnostic tests from a small amount of blood.

Meanwhile, the company secretly relied on traditional methods to run tests and provided patients with inaccurate results, prosecutors said.

Holmes, who started the company as a college student and became its public face, was indicted alongside Balwani, her former romantic partner, in 2018.

Davila later granted each a separate trial after Holmes said she would take the stand and testify that Balwani was abusive in their relationship. He has denied the allegations.

Holmes was convicted in January on four counts of fraud and conspiracy but acquitted of defrauding patients.

Davila sentenced Holmes to 11-and-a-quarter years in prison at a hearing last month, calling Theranos a venture “dashed by untruths, misrepresentations, plain hubris and lies”.

Prosecutors subsequently argued Balwani should receive 15 years in prison, saying he knew Theranos’ tests were inaccurate from overseeing the company’s laboratory operations, and decided to “prioritise Theranos’ financial health over patients’ real health”.

The probation office had recommended a nine-year sentence.

Balwani’s lawyers asked for a sentence of probation, arguing that he sought to make the world a better place through Theranos and was not motivated by fame or greed.

Once valued at $US9 billion ($A13 billion), Theranos promised to revolutionise how patients receive diagnoses by replacing traditional labs with small machines envisioned for use in homes, drugstores and even on the battlefield.

The company collapsed after a series of Wall Street Journal articles in 2015 questioned its technology.

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