Ex-Theranos President Balwani Gets 13-Year Prison Term in Fraud Case

I wonder about when this train actually went off the rail and Balwani and Holmes both knew it. It reminds me somewhat of Bernie Madoff‘s $20 Billion deception, in that if Bernie had fessed up when his performance first went south rather than falling into the “Ponzi” abyss, he might have been largely forgiven. Bt he just couldn’t do it and as time went on…well we know what happened. Many $millions stolen from widows, orphans, charities and more.

Was there a similar trajectory for Balwani and Holmes? Was there a time when they looked at each other and said, “Uh oh,” and could have turned back but did not?  Because somewhere along the way they surely knew what was going down and kept it going anyway. Now have to face the music as always is the case. It is simply “The Law of Cause and Effect” unfolding as it does. Hopefully for them there will be less tragic endings than befell Bernie. It depends on how they handle what they have wrought. We’ll see!   Ex-Theranos President Balwani Gets 13-Year Prison Term in Fraud Case

https://www.bloomberg.com/news/articles/2022-12-07/ex-theranos-coo-balwani-gets-13-years-prison-in-fraud-case?sref=gM6jgoKs

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Ex-Theranos president Balwani sentenced to nearly 13 years for fraud

By

Dec 7 (Reuters) – A U.S. judge on Wednesday sentenced former Theranos Inc President Ramesh “Sunny” Balwani to 12 years and 11 months in prison on charges of defrauding investors and patients of the blood testing startup led by Elizabeth Holmes, a spokesperson for the U.S. attorney’s office confirmed.

U.S. District Judge Edward Davila in San Jose, California, imposed the sentence on Balwani, who was convicted by a jury on two counts of conspiracy and 10 counts of fraud in July.

Prosecutors said Balwani, 57, conspired with Holmes, 38, to deceive Silicon Valley investors into believing the company had achieved miniaturized machines that could accurately run a broad array of medical diagnostic tests from a small amount of blood.

Meanwhile, the company secretly relied on traditional methods to run tests and provided patients with inaccurate results, prosecutors said.

Holmes, who started the company as a college student and became its public face, was indicted alongside Balwani, her former romantic partner, in 2018.

Davila later granted each a separate trial after Holmes said she would take the stand and testify that Balwani was abusive in their relationship. He has denied the allegations.

Holmes was convicted in January on four counts of fraud and conspiracy but acquitted of defrauding patients.

Davila sentenced Holmes to 11-1/4 years in prison at a hearing last month, calling Theranos a venture “dashed by untruths, misrepresentations, plain hubris and lies.”

Prosecutors subsequently argued Balwani should receive 15 years in prison, saying he knew Theranos’ tests were inaccurate from overseeing the company’s laboratory operations, and decided to “prioritize Theranos’ financial health over patients’ real health.”

The probation office had recommended a nine-year sentence.

Balwani’s attorneys asked for a sentence of probation, arguing that he sought to make the world a better place through Theranos and was not motivated by fame or greed.

Once valued at $9 billion, Theranos promised to revolutionize how patients receive diagnoses by replacing traditional labs with small machines envisioned for use in homes, drugstores and even on the battlefield.

The company collapsed after a series of Wall Street Journal articles in 2015 questioned its technology.

The case is U.S. v. Balwani, U.S. District Court, Northern District of California, No. 18-cr-00258.

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Ex-Theranos President Balwani Gets 13-Year Prison Term in Fraud Case

Ex-Theranos President Balwani Gets 13-Year Prison Term in Fraud Case

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I wonder about when this train actually went off the rail and Balwani and Holmes both knew it. It reminds me somewhat of Bernie Madoff’s $20 Billion deception in that if Bernie had fessed up when his performance first went south and he tried to cover it up, only to make it worse, he might largely have been forgiven and returned to his original trading business. But he just couldn’t do that and as time went on…well we know the result.

Was there a similar trajectory for this pair? A time when they looked at each other and said, “Uh oh!” Not that it matters really. Somewhere along the way they knew what was going down and kept it going for as long as they could. Now have to face the music as eventually, always is the case. It is simply “The Law of Cause and Effect” unfolding. Hopefully for them there will be less tragic endings than Bernie. It depends on how they handle what they have wrought! We’ll see.