Trial of former Theranos exec Sunny Balwani draws to a close – The Washington Post

Science & Technology

SAN JOSE — Sunny Balwani, the former business and romantic partner of disgraced biotech entrepreneur Elizabeth Holmes, faced closing arguments in his fraud trial here Tuesday.
The former chief operating officer of blood-testing start-up Theranos is charged with 10 counts of wire fraud and two counts of conspiracy to commit wire fraud, one more count than Holmes ultimately faced last year.
Holmes, who has been the subject of multiple books, podcasts, a documentary and recently a Hulu series, was convicted on four counts of misleading investors in early January this year. The convictions carry possible sentences of fines and prison time, and she is expected to be sentenced in September.
Theranos founder Elizabeth Holmes found guilty in landmark Silicon Valley fraud case
Theranos was a highflying biotech start-up founded in 2003 that eventually purported to be able to run hundreds of tests from just a few drops of blood drawn from a patient’s fingertip. The company attracted hundreds of millions of dollars in investment, including from high-profile figures like the prominent Walton family of Walmart fame, media mogul Rupert Murdoch, Mexican businessman Carlos Slim and Oracle co-founder Larry Ellison.
Theranos’s board members included former secretaries of state Henry Kissinger and George Shultz and former secretary of defense Jim Mattis. Investors and the media seemed captivated by the young CEO — Holmes started the company when she was just 19 — and her desire to make medical testing cheaper and less painful.
But the company ultimately crumbled in 2018 after years of scrutiny from media and federal regulators. Theranos’s technology could not run nearly as many tests as suggested and results were plagued with inaccuracies. Holmes was charged with massive fraud by the Securities and Exchange Commission and later the government leveled the criminal charges against her and Balwani.
What you need to know about Elizabeth Holmes and the Theranos trial
The pair had their cases separated from each other after Holmes alleged in court documents that Balwani had abused her during their romantic relationship. He has denied the claims.
Balwani, like Holmes, has pleaded not guilty. His trial has mirrored hers in many ways, including calling several of the same witnesses who testified about the company’s lab conditions and their investments in the firm.
During closing arguments on Tuesday, prosecutor Jeff Schenk told jurors that Balwani acted with Holmes to mislead investors and patients, allegedly leading them to believe that Theranos’s technology was more accurate and the company was more successful than it really was. Schenk told the jury that Balwani controlled many parts of the business.
“I am responsible for everything at Theranos,” Balwani wrote in a 2015 text message to Holmes that Schenk showed jurors. “All have been my decisions too.”
Balwani helped manage the company’s doomed relationship with drugstore chain Walgreens, and prosecutors have said that the former executive sent some investors binders that included allegedly misleading statements, including one that said “Theranos offer tests with the highest levels of accuracy.” In reality, Theranos could only run about a dozen tests on its own machine, previous testimony has revealed, and many former employees questioned the accuracy of the technology.
“Mr. Balwani knew that Theranos was not generating, and would not generate, any meaningful revenue by being honest with people,” Schenk said. “So he chose a different path.”
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Unlike Holmes, Balwani did not testify in his own defense. His legal team called only two witnesses — a physician who used Theranos’s services, and a technology expert who testified about an electronic database that held Theranos test results but that the government was not able to access.
Holmes testified on the stand for more than 20 hours in November and December, drawing a large crowd to the small federal courtroom each day as international media and interested members of the public traveled to hear her speak in her own defense.
Closing arguments in Balwani’s trial began Tuesday and will likely last more than a day. The trial, which has suffered coronavirus-related delays, could be in the jury’s hands as soon as this week.
After a more than three-month proceeding, a federal jury found Theranos founder Elizabeth Holmes guilty on four counts of wire fraud and conspiracy to commit fraud against investors.
Holmes was accused of misleading investors and patients about the capability of her company’s blood-testing technology.
She testified that she believed the information she was providing to her prospective business partners.
For some, the trial was a chance to get the full story of what happened inside the company, and an opportunity for the Silicon Valley ethos to be held in front of a public mirror.
Fellow Silicon Valley entrepreneurs and backers say Holmes represented only the worst of start-up culture.
Robin Givhan: Elizabeth Holmes used every trope in the book
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