Ex-Theranos President Sunny Balwani Has Been Sentenced to Jail
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Elizabeth Holmes has been the star of multiple media projects. There’s the HBO documentary The Inventor, the Wall Street Journal podcast Bad Blood, a book by the same name, and ABC’s podcast The Dropout, which Hulu recently adapted into a miniseries starring Amanda Seyfried.
The other main character from this real-life saga is Ramesh "Sunny" Balwani, the Theranos founder's business partner and ex-boyfriend. Balwani played a major role in the rise and collapse of the blood-testing business. In fact, he met Holmes when she was just 18 and joined Theranos in its early days. The pair hid their romantic relationship and the fact that they lived together from investors.
Now, after a jury has just found Sunny guilty of defrauding investors and patients, he has received his a sentence of nearly 13 years in federal prison. But how did it get to that point? Here's the lowdown on Balwani and how he fits into the never-ending Theranos scandal.
He Invested $13 Million Into Theranos
After Holmes launched Theranos at the age of 19, she needed a second round of investment to help it continue to grow. Balwani stepped forward with a substantial loan that kept the company afloat.
"The company was low on cash, and I knew of the mission and that what the company was trying to do was paramount and I offered to help the company and I ended up giving a $13 million personal loan," Balwani, a former software executive, said in court testimony obtained by podcast The Dropout. "It was interest-free. It was a good-faith loan."
Six months later, in late 2009, Balwani was made the president and COO of the company, in spite of the fact he didn't have experience in science or lab testing. Elizabeth focused on big-picture vision while it was Balwani's job to manage the employees and business partners. One former employee says, also on the podcast, that Balwani earned the nickname "the enforcer" due to his intimidating management style.
“The atmosphere of the place became caustic,” former Theranos vice president Anthony Nugent testified, according to Bloomberg.
Balwani and Holmes Had a Romantic Relationship They Didn't Reveal to Investors
Holmes and Balwani met in 2002 when she was about 18 years old and he was 37. They were both in China studying at Beijing University as part of a Stanford program.
In media coverage, Holmes was portrayed as unattached. In a 2014 New Yorker article, Theranos investor Henry Kissinger says he and his wife tried unsuccessfully to set Holmes up on dates. And Holmes's mother told that reporter: “As a parent, I do hope that at some point she will have time for herself.”
But Holmes and Balwani had a long-term romantic relationship, Holmes later testified. She admits they kept the relationship from investors. And, despite sharing a residence four miles from Theranos headquarters, many of the employees were unaware they were involved.
Balwani and Holmes's relationship ended at about the same time he left Theranos. "Once we started working together it was a very intense relationship and that romantic piece that was there at the very beginning died," Holmes said during her deposition. "I don't think it happened in one moment, but it was very clear we were colleagues."
He Maintained His Innocence To The Very End
In June 2018, a federal grand jury indicted Holmes and Sunny on multiple counts of wire fraud and conspiracy to commit wire fraud. The victims of their crimes were listed as investors and patients. Both pleaded not guilty and were released on bail. In September of 2020, at Balwani’s request, the presiding judge, U.S. District Judge Edward Davila, announced that Balwani and Homes would be tried separately. Elizabeth Holmes was found guilty on four out of seven counts of criminal fraud against investors, and was sentenced to federal prison for 11 years and three months. Meanwhile, Balwani received nearly 13 years in prison, despite facing the same 12 counts as his ex.
Throughout the entire Theranos ordeal, Balwani had maintained his innocence. “In over 28 years of practicing law, as both a federal prosecutor and a defense attorney, I have never seen a case like this one, where the government brings a criminal prosecution against a defendant who obtained no financial benefit and lost millions of dollars of his own money,” attorney Jeffrey Coopersmith told Vanity Fair in 2018. “Mr. Balwani committed no crimes. He did not defraud Theranos investors, who were among the most sophisticated in the world. He did not defraud consumers but instead worked tirelessly to empower them with access to their own health information. Mr. Balwani is innocent, and looks forward to clearing his name at trial.”
In February, after Holmes's trial wrapped, Balwani’s counsel asked the judge to exclude from his trial any evidence or information obtained during Holmes’s proceedings. The request came after Holmes took the stand in her own trial and accused Balwani of abuse and blamed him for Theranos’s collapse. But text messages revealed during the prosecution contradicted her narrative. Both Holmes and Balwani seemed to be complicit in misleading investors and the public about Theranos's blood-testing capabilities.
In an interview with The New York Times, Reed Kathrein, a San Francisco lawyer who sued Theranos in 2016 on behalf of investors, said “She was the Wizard of Oz, dazzling the investors and media, but [Balwani] was the one behind the curtain working the machinery.” Reed added: “He knew everything.”
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