SAN JOSE, Calif.— A federal jury convicted Ramesh “Sunny” Balwani, the former top lieutenant to Theranos Inc. founder Elizabeth Holmes, on all 12 charges that he helped perpetuate a yearslong fraud scheme at the blood-testing startup.
The verdict is the second conviction against Theranos leadership and comes six months after a jury found Ms. Holmes guilty of fraud, securing another major for the U.S. government, which brought the case against the pair in 2018. It brings to conclusion one of Silicon Valley’s most notorious startup implosions, which saw nearly $1 billion of investor money evaporate after revelations that the company delivered inaccurate blood-test results to patients, including for life-threatening conditions, and Ms. Holmes and Mr. Balwani lied about its proprietary technology.
Mr. Balwani, Theranos’s former president and chief operating officer, was charged with 10 counts of wire fraud and two counts of conspiracy to commit wire fraud. His case, like Ms. Holmes’s, marked a rare prosecution of a technology executive, and served as a referendum on startups taking the culture of “fake it until you make it” too far. Mr. Balwani faces up to 20 years in prison for each count for which he was found guilty, but former prosecutors said such a stiff sentence is rare in white-collar cases.
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Mr. Balwani’s verdict is a broad indictment of his and Ms. Holmes’s efforts to deceive patients and investors about the company’s blood-testing technology. It also shows how the government, in its second time prosecuting the case against the Theranos executives, appeared to have buttoned up its arguments following Ms. Holmes’s trial, which had a more mixed result. Ms. Holmes was found guilty on four of the 11 charges against her and acquitted of four, and the jury couldn’t reach a unanimous conclusion on three. Mr. Balwani didn’t testify in his own defense, as Ms. Holmes did.
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