Theranos saga returns to courtroom as ex-COO Balwani set for trial
Sunny Balwani is the ex-president and chief operating officers of Theranos Inc.
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At Theranos’ blood-testing company, he was behind the scenes. In his case for criminal fraud, he is the main actor.
The trial of Ramesh Balwani (ex-president and chief operating officer at Theranos) opens Wednesday in San Jose Federal Courthouse. In January, a jury found Elizabeth Holmes to be Theranos’ ex-CEO. guilty of four countswire fraud conspiracy and wire fraud.
A jury of six men and six women will decide the fate of Balwani, who has been charged with the same crimes as Holmes. Each of the charges carries a maximum sentence of 20 years imprisonment. He did not plead guilty.
Holmes awaits sentencingIn September she might reappear as an important witness against Balwani. Balwani was also Theranos No. Balwani was Holmes’ boyfriend.
Holmes, who was a victim of psychological and sexual abuse during her trial, accused Balwani. Balwani denies the accusations.
Reed KathreinCNBC spoke with a lawyer who represented investors in a case against Holmes and Theranos. He said that Balwani was key to Theranos’ ruse. This involved lying about Theranos’ technology and defrauding shareholders of hundreds of million dollars.
Kathrein who wasn’t involved with Balwani’s case for criminal fraud said, “Sunny managed everything, knew all.” He was not the most visible person and may not have given the statements but he was complicit in the money being obtained from patients and investors.
The widespread publicity about Holmes’ case delayed opening of arguments. Judge Edward Davila, the attorney representing each side, had difficulties finding an impartial jury. To fill the 12-member jury, it took nearly 100 people to be questioned.
When asked by lawyers if they’d heard of Holmes and Theranos, over half the jurors raised their hand during jury selection. Many said that they knew of Holmes’ allegations against Balwani.
After Holmes was the primary witness in Balwani’s trial, the prosecution has not yet indicated whether it will call Holmes back on the stand. Kathrein stated that Holmes could be called to testify against Balwani, in an effort to decrease her prison sentence.
Kathrein explained that Elizabeth had already stated she wanted to throw him under his bus. Kathrein said that she did the same thing when he was leaving Theranos. At her own trial, she did it again. “I wouldn’t be surprised if she throws the man under the bus again, and testifies in her defense to avoid a harsh sentence.”
Balwani is an attorney, Jeffrey Coopersmith The attorney for Holmes declined to comment. CNBC reached out to Holmes’ attorneys for clarification.
Elizabeth Holmes (Theranos founder) and her family depart the Robert F. Peckham Federal Building, U.S. After the jury found Holmes guilty of four charges in San Jose (Calif.) on Monday, January 3, 2022, Courthouse
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Balwani was a former executive in software who earned millions in the dot-com boom. Holmes met Balwani in Beijing in 2002 while they were studying Mandarin. This was in the summer prior to Holmes’ first year at Stanford University. At the time, she was only 18 years old. He was 37.
Holmes began Theranos that year. She soon dropped out from Stanford. Balwani and Holmes moved in with each other in Palo Alto in 2005. But their twelve-year relationship was kept secret from employees, investors and business partners.
Balwani first became involved with Theranos in 2009. Balwani offered a loan for $13million to the company when it was in financial trouble. He was elected president and chief operating officer six months later.
Holmes claims that Balwani was her mentor who advised her how to manage a business. She testified that she knew Balwani was a businessman who would succeed and she worked with him. Microsoft co-founder Bill Gates.
You can find the most dramatic momentHolmes, during her trial of four months, described Balwani’s controlling behavior. The jury was told by Holmes that Balwani controlled her life, from her daily schedule to her diet. Balwani was not to blame for her misfortunes, but she said that he did not tell her how to address investors and pharmacy partners. Walgreens.
Holmes stated to the jury that Holmes was not who he claimed to be. Holmes said that he realized that if I wanted to solve the problems and let the company realize its full potential, I needed to do it without him.
Holmes claimed that Holmes left the Silicon Valley residence she shared with Balwani in 2016 following an inspection by regulators which revealed serious problems at Theranos. Balwani left Theranos that year.
Balwani and Holmes were charged by the Securities and Exchange Commission with massive fraud in March 2018. Holmes and Balwani were charged with “massive fraud” by the Securities and Exchange Commission in March 2018. Holmes agreed not to admit or deny the accusations, but Balwani turned down the deal. He is now fighting separate charges.
Danny Cevallos is an attorney and NBC News legal analysts. He said that Balwani was at a disadvantage since Holmes has been convicted. Text messages obtained by CNBCBoth Holmes and Balwani participated in company operations during the Holmes trial.
Cevallos stated that the government had “figured out what worked with Holmes” and was able to make it work. This makes this case even more “airtight,” Cevallos added.
Barbara McQuade is a former U.S. Attorney and agrees with Balwani’s long odds.
McQuade who is also a NBC legal analysts said, “There’s usually more advantage to defense when it comes to a second case.” Witnesses will almost always admit minor contradictions to their testimony. Good defense attorneys will spot inconsistencies and highlight them to prove that the witness is not remembering.
McQuade suggested that Holmes may not be called by prosecutors because she is “a fraudster” and is skilled at fraud.
Cevallos sees also the logic in keeping Holmes from the podium.
Cevallos claimed that “the government is aware of Elizabeth’s persuasive persona.” They prosecuted her for it. She’s been convicted without her consent and she won’t be able to plead guilty to anything else.