Former Theranos executive convicted of fraud
(The Center Square) – Former Theranos executive Ramesh “Sunny” Balwani was convicted of federal fraud by a jury in San Jose Thursday for working with former Theranos CEO Elizabeth Holmes to mislead investors and patients.
Balwani was found guilty of 12 felony counts for defrauding Theranos investors and patients. A 2018 indictment against Holmes and Balwani alleged that the pair were involved in a “scheme to defraud investors” by offering misleading statements about the capability and reliability of the company’s product as well as the state of the company’s finances.
Bulwani served as Chief Operating Officer at Theranos, where he oversaw operations at the blood-testing company that claimed it could run a range of clinical tests with just a few drops of blood. Bulwani was hired at Theranos in 2009, and at the time, he and Holmes were secretly dating.
Earlier this year, Holmes was convicted on four counts of investor fraud and conspiracy. She faces up to 20 years in prison, and her sentencing is scheduled for September. In May, Holmes asked the judge to overturn her conviction for wire fraud, according to Business Insider.
Like Holmes, Balwani has the option to appeal and could face up to 20 years in prison. His sentencing date has not yet been set.
Problems with the startup’s blood-testing technology were revealed in 2015 through a series of articles in the Wall Street Journal. Whistleblowers from the company accused Theranos of ignoring failed quality control tests, as reported by the Journal.
The technology also sparked outrage from patients who trusted results from Theranos that were ultimately inaccurate.
The faulty technology had an acute impact in Arizona, where Gov. Doug Ducey signed a 2015 bill allowing individuals to get testing directly from a lab without a doctor’s orders. During the bill signed, Ducey specifically recognized Holmes for “the foresight and innovative spirit to drive this measure and see it through to the finish line.”
Between 2013 and 2016, the Phoenix New Times reported that Theranos sold 1.5 million blood tests to 175,000 Arizona residents through its partnership with Walgreens. Of those, about 10% of the tests were voided or corrected.
As a result, the company agreed to pay a $4.65 million consumer-fraud settlement under an agreement negotiated with Arizona Attorney General Mark Brnovich, according to Arizona Central.
Disclaimer: This content is distributed by The Center Square
