For months, Ramesh Balwani’s lawyer has sought to distinguish him from his former girlfriend and business partner Elizabeth Holmes of the failed blood test company Theranos.
Holmes was convicted in January of deceiving a start-up investor. Balwani seeks another outcome in his own fraud trial.
But on Tuesday, in a statement closing Mr. Balwani’s trial, prosecutors linked him directly to Mr. Holmes and a long-standing fraud in Theranos. Jeffrey Schenck, assistant lawyer in the United States and chief prosecutor of the case, displayed a text message sent by Balwani to Holmes in 2015. This was used as evidence of the trial.
“I’m responsible for everything in Theranos,” Balwani wrote. “Everything was my decision.”
The text message acknowledged guilt, adding that “he acknowledges his role in fraud.”
The presentation concludes more than three months of testimony at Mr. Balwani’s trial. This is a good reflection of Mr. Holmes’s fall last year. Holmes and Balwani, 57, were charged in 2018 for exaggerating the functionality and performance of Theranos’ blood testers when the product didn’t really work and the business was struggling. .. The two pleaded not guilty. Holmes was convicted on four of the 11 indictments.
Mr. Balwani’s trial, known as Sunny, lacked a fanfare in the case that attracted Mr. Holmes’ attention. Nonetheless, it acts as a coder to the declining era of growth for start-ups that often relied on hype and exaggeration. Holmes and Balwani are one of the few technical executives to date charged with fraud.
Barwani pointed her finger at her, just as Holmes tried to blame others for the Theranos deception. Throughout the trial, his lawyer claimed that many of Theranos’ blood tests were successful. And they said Holmes controlled Theranos instead of Balwani. They were set to start closing arguments later on Tuesday.
Holmes, now 38, met Barwani at the age of 18. After Holmes founded Theranos, they started dating a few years later. In 2009, Balwani invested in Theranos, becoming Chief Operating Officer and ultimately responsible for the lab. The two kept their relationship secret and lived together in a vast co-owned home in Atherton, California.
In 2016, Balwani left the company and broke up with Holmes after Theranos was accused of lying about his blood testing capabilities. The two were together charged with fraud, but Holmes alleged in filings to end the case and accused Balwani of emotional and sexual abuse. Her trial included dramatic testimony of her accusations. The subject was excluded from Mr. Balwani’s trial.
To convict Mr. Balwani, the prosecutor must convince the jury that he deliberately lied to investors and patients about Theranos’ blood tests and commerce.
Prosecutors sought to blame Balwani for the financial forecasts that Theranos showed to investors and the state of the institute. New witnesses included investors and executives who traded directly with Mr. Balwani instead of Mr. Holmes.
One forecast presented to investors in October 2014 showed that Theranos would bring $ 140 million that year. In reality, income was limited. The following year, Barwani predicted near $ 1 billion in revenue from selling to investors. Theranos’s internal predictions were much lower, evidence showed, and reality was close to zero.
Patrick Mendenhall, a new witness who traded directly with Mr. Balwani while investing in Theranos, outlined a promise that was misleading or turned out to be wrong.
Brian Grossman, an investor in hedge fund PFM Health Sciences, who was also a witness to Holmes’ trial, testified that Balwani provided the team with financial forecasts that far exceeded Theranos’s expected earnings.
“When Mr. Balwani communicates with investors, it’s for the purpose, and the purpose is to trick them into making money,” Schenck said.
The prosecutor also emphasized Mr. Balwani’s role in running Theranos’s lab, which executives called the “disaster zone” in a 2014 text message used as evidence. Schenck also said Balwani would “remove the objection” by threatening or pushing out employees who expressed concern about the Theranos exam, such as former laboratory director Adam Rosendorff, who testified in both trials. Stated.
Witnesses were not, in particular, James Mattis, a former Secretary of Defense and director of Theranos, and Holmes, who testified in Holmes’ trial. Mr Balwani did not testify in his own defense.
If convicted, Mr. Balwani and Mr. Holmes will be sentenced together in September.