Theranos Chairman Sunny Balwani Found Guilty of Fraud | Scientific and technical news

Ramesh “Sunny” Balwani, the former chairman of Theranos, the American company that claimed to have revolutionized blood testing, has been found guilty of fraud.

Balwani was convicted of misleading investors in what has been described as one of the biggest frauds in Silicon Valley history.

After five days of deliberation, the jury hearing Balwani’s case in San Jose, Calif., found him guilty on all 12 counts against him.

His former business and love partner Elizabeth Holmes, 37, was found guilty of fraud in a separate trial earlier this year.

The trials were held separately because Holmes alleged that she suffered abuse from Balwani that led her to mislead investors. Balwani, 57, denied the allegations.

Former US President Bill Clinton speaks with Alibaba Group Executive Chairman Jack Ma and Theranos CEO Elizabeth Holmes at the Clinton Global Initiative annual meeting in New York
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Holmes once shared a stage with President Clinton and Jack Ma

Fall

Founded in 2003 by 19-year-old Holmes, Theranos was a Silicon Valley darling that shut down after claims it invented a revolutionary finger-prick blood test were dismantled.

The US government alleged the couple orchestrated “an elaborate multi-year fraud”.

At the height of its success, the company was valued at $9billion (£7billion) and Holmes shared a stage with former President Bill Clinton and Chinese entrepreneur Jack Ma during a panel discussion on the equality and opportunity.

But a month later, the Wall Street Journal ran a front-page story claiming the company’s blood-testing technology was so flawed that Theranos was using equipment made by other companies to perform tests in its labs.

The company’s former chief scientist had killed himself two years earlier after telling his wife the finger-prick technology didn’t work, the newspaper said.

REFILE - ADDING COUNTRY Former Theranos CEO Elizabeth Holmes arrives for a hearing in federal court in San Jose, California, U.S., July 17, 2019. REUTERS/Stephen Lam

Charges

Investigations by medical and financial regulators soon followed, and in 2018 criminal charges were brought against Holmes and Balwani accusing them of fraud.

A jury convicted Holmes of two counts of wire fraud and two counts of conspiracy to commit fraud after seven days of deliberation and a three-month trial.

She faced 11 counts in total and was found not guilty on four felony counts, with the jury deadlocked on the other three.

During his trial, federal prosecutors presented evidence portraying Holmes as a charlatan obsessed with fame and fortune.

But she claimed she was emotionally and sexually abused by Balwani and presented herself in court as a visionary pioneer in male-dominated Silicon Valley.

Holmes also told the court that she initially thought her company’s groundbreaking blood tests weren’t the fake technology they ultimately turned out to be.

The company’s downfall was dramatized on the acclaimed show The Dropout, starring Amanda Seyfried and Naveen Andrews.

Holmes and Balwani will be sentenced in the fall. They face up to 20 years in prison and will potentially have to repay millions of dollars in compensation to the victims of their fraud.

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