Elizabeth Holmes and Sunny Balwani were “partners” in Fraud: Federal Agencies

Federal prosecutors shot former Theranos executive Ramesh “Sunny” Balwani in the fraud trial on Tuesday — alleging he and his ex-lover Elizabeth Holmes worked closely to mislead investors about the blood-testing startup’s business.

Federal Attorney Robert Leach argued that Balwani and Holmes “were partners in everything, including their crimes,” as both legal teams made their opening statements in the long-awaited trial.

Balwani, the former chief operating officer of Theranos, faces 12 counts of fraud related to his alleged misdeeds while working for the doomed medical technology startup.

“The defendant and Holmes knew that the rosy untruths they told investors contradicted the reality on Theranos,” Leach said The Merkur News.

Balwani, 56, is on trial about two months after Holmes was found guilty on three counts of wire fraud and one count of conspiracy to commit fraud. Prosecutors portrayed Balwani as an active participant who defrauded investors and put patients at risk with fake information.

Sunny Balwani
The defense argued that Elizabeth Holmes, not Sunny Balwani, was in control of Theranos.

Leach argued that Balwani was in charge of Theranos’ lab, claiming that “patients’ medical decisions were being skewed and put at risk.”

Theranos was once valued at $9 billion and claimed it had developed a proprietary device that could perform dozens of tests on just a few drops of a patient’s blood. But the startup imploded after a series of damning news reports revealed its devices were producing inaccurate results and failing to perform the functions Holmes claimed.

The stunning sinking drew a lot of media attention, including a Hulu series called The Dropout, which details Holmes’ life — and his relationship with Balwani — and an upcoming movie starring actress Jennifer Lawrence.

Sunny Balwani
Former Theranos manager Sunny Balwani faces a dozen fraud cases.
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Holmes’ defense team placed some blame on Balwani during their trial, arguing that he was abusive and manipulative of Theranos’ founder during their relationship.

Targeting the media’s portrayal of his client, Balwani’s defense attorney Steve Cazares argued in his opening statement that “the headlines and sensational stories about Theranos and Elizabeth Holmes have no place in this trial.”

Holmes tearfully opened up about the dark side of her relationship with Balwani during her own trial. During her testimony, she claimed that during their relationship, Balwani controlled almost every aspect of her life — including what she ate and how she spoke.

Holmes also claimed Balwani sexually abused her during their relationship – allegations he has denied.

“He made me have sex with him when I didn’t want to because he said he wanted me to know he still loved me,” Holmes said on the witness stand.

Cazares noted that Balwani joined Theranos in 2009 — long after Holmes founded the startup — and was a key early investor who never sold his stake. The defense attorney cabled his defense over fraud allegations, arguing that the figures provided to investors should be sales projections rather than firm projections.

Elizabeth Holmes
Disgraced Theranos founder Elizabeth Holmes faces conviction later this year.
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The defense also argued that Holmes, not Balwani, was the main driver and source of information for Theranos.

“Sunny Balwani didn’t launch Theranos, he didn’t control Theranos,” Cazares said. “Elizabeth Holmes, not Sunny, founded Theranos and built Theranos.”

Balwani faces up to 20 years in prison for each fraud count, but is not expected to face the maximum sentence if found guilty. The process is expected to take about two months.

Holmes is due to be sentenced later this year once Balwani’s trial is complete. Elizabeth Holmes and Sunny Balwani were “partners” in Fraud: Federal Agencies


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