Ex-Theranos president Balwani sentenced to nearly 13 years for fraud

Dec 7 (Reuters) – A U.S. judge on Wednesday sentenced former Theranos Inc chairman Ramesh “Sunny” Balwani to 12 years and 11 months in prison for defrauding investors and patients of the blood testing startup run by Elizabeth Holmes, spokeswoman for the U.S. Attorney’s Office confirmed.

U.S. District Judge Edward Davila in San Jose, Calif., imposed the sentence on Balwani, who was found guilty by a jury of two counts of conspiracy and 10 counts of fraud in July.

Prosecutors said Balwani, 57, conspired with Holmes, 38, to mislead Silicon Valley investors into believing the company had made miniaturized machines capable of accurately performing a wide range of tests. medical diagnosis from a small amount of blood.

During this time, the company secretly relied on traditional methods to perform tests and provided patients with inaccurate results, prosecutors said.

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

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

Holmes was convicted in January of 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 company “destroyed by untruths, misrepresentations, hubris and lies”.

Prosecutors later argued that Balwani should be sentenced to 15 years in prison, saying he knew Theranos’ tests were inaccurate due to oversight of the company’s lab operations, and decided to ” prioritize the financial health of Theranos over the actual health of patients”.

The probation office had recommended a nine-year sentence.

Balwani’s lawyers have requested a probation sentence, arguing that he was seeking to make the world a better place through Theranos and was not driven by fame or greed.

Once valued at $9 billion, Theranos has promised to revolutionize the way patients receive diagnostics by replacing traditional labs with small machines designed for use in homes, pharmacies and even on the battlefield.

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

The case is US v. Balwani, US District Court, Northern District of California, No. 18-cr-00258.

Reporting by Jody Godoy in New York; Editing by Noeleen Walder and Bill Berkrot

Our standards: The Thomson Reuters Trust Principles.

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