Indian-origin former top Theranos executive Balwani loses bid to stay jail-free during appeal

Ramesh “Sunny” Balwani, the former lover and business partner of Theranos CEO Elizabeth Holmes. | Photo Credit: AP

Ramesh “Sunny” Balwani, the Indian-origin former chief operating officer of a failed US-based blood-testing start-up, Theranos, has lost his bid to remain free as he appeals his conviction on the charges of fraud that prosecutors said endangered patient health. and defrauded the company’s investors of millions of dollars, according to a media report.

A federal judge on March 9, in a 17-page ruling, denied Mr. Balwani’s motion to remain free until his appeal to a higher court is resolved, the CBS News channel reported.

US District Judge Edward Davila held a nearly two-hour hearing on Mr. Balwani’s motion in mid-February but delayed sentencing until six days before the convict was due to report to prison.

Mr Balwani, 57, was sentenced in December last year in California to 12 years and 11 months in federal prison for fraud that endangered patient health by misrepresenting the accuracy of Theranos’ blood testing technology and defrauding millions of dollars of blood test company investors. .

In addition to the 155-month prison sentence, the District Judge sentenced Mr. Mr. Davila Balwani to three years of supervision following his release from prison. Mr. Balwani was ordered to surrender on March 15, 2023, to begin serving his prison sentence.

In the order issued late March 9, District Judge Davila wrote that although Mr. Balwani is “not likely to flee or pose” a danger to the community, “the most important requirement for remaining free as viewed by the 9th Circuit Court of Appeals. the case was not addressed”, said the report.

The convict did not show there was a “substantial” error at trial that would “likely result in a reversal or new trial,” the report added.

Mr. Balwani worked from September 2009 to July 2016 at the Palo Alto-based blood-testing company founded in 2003 by his ex-girlfriend, Elizabeth Holmes, once touted as Silicon Valley’s rising star.

Mr. Balwani and Ms. Holmes, who became the company’s chairman and CEO, said Theranos has developed a “revolutionary blood test” that can run any blood test run by conventional laboratories using only a small blood sample that drawn with a finger-stick rather than the traditional draw from a vein, US Attorney Stephanie Hinds said in a statement at the time of the trial.

The duo claimed that the Theranos proprietary analyzer produced results that were cheaper, more reliable and less variable than existing methods and obtained results faster than before.

However, evidence from last year’s trial showed that Mr. Balwani and Ms. Holmes said the analyzer performed only a few basic tests and was slower than existing devices.

According to the statement, the two repeatedly used a conventional machine to obtain the results of the blood test that should be performed by the Theranos analyzer.

They led investors and the public to believe that Theranos was conducting all of its tests using only its analyzer.

Trial evidence showed that the fraud brought “incredible personal wealth” to Mr. Balwani, who owns nearly 30 million Theranos shares — more than 6% of the company — worth hundreds of millions. dollar at the peak of fraud.

Last year, Mr. Davila sentenced Holmes to 11 years and three months in federal prison and ordered him to surrender to begin serving his sentence on April 27, 2023.

Federal criminal charges were initially filed against Mr. Balwani and Ms. Holmes in June 2018. In July 2020, a federal grand jury returned a superseding indictment charging the two with two counts of conspiracy to commit wire fraud and ten counts of wire fraud. In July this year, a federal jury convicted Mr. Balwani on all counts after a four-month trial.

Mr. Balwani was tried separately from Ms. Holmes, and at his trial, Holmes was not convicted of all counts.

Mr. Balwani was born in Pakistan, but his family is said to have moved to India. He immigrated to the US from India in the 1980s and attended the University of Texas.

Author: Amit Kumar
Amit Kumar is a highly experienced financial expert with over 10 years of experience in banking and finance. He shares his insights on loans, finance, and business strategies through engaging articles on this Loan & Business site, offering practical advice for anyone seeking to improve their financial situation. Amit's mission is to empower his clients and readers to make informed financial decisions and achieve their financial goals.

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