For months, Ramesh Balwani’s attorneys have tried to tell apart him from Elizabeth Holmes, his former girlfriend and enterprise associate on the failed blood-testing firm Theranos.
Ms. Holmes was discovered responsible of defrauding the start-up’s buyers in January. Mr. Balwani is searching for a distinct final result in his personal fraud trial.
But on Tuesday, in closing statements for Mr. Balwani’s trial, prosecutors tied him on to Ms. Holmes and the yearslong fraud at Theranos. Jeffrey Schenk, an assistant U.S. lawyer and a lead prosecutor on the case, displayed a textual content message that Mr. Balwani despatched Ms. Holmes in 2015 that was used as proof in the trial.
“I am responsible for everything at Theranos,” Mr. Balwani wrote. “All have been my decisions too.”
The textual content message was an admission of guilt, Mr. Schenk mentioned, including, “He’s acknowledging his role in the fraud.”
The presentation capped greater than three months of testimony in Mr. Balwani’s trial, which largely mirrored that of Ms. Holmes’s final fall. Ms. Holmes and Mr. Balwani, 57, had been charged in 2018 for exaggerating the capabilities of Theranos’s blood-testing machines and enterprise efficiency when, in truth, the merchandise didn’t work and its enterprise was struggling. The duo pleaded not responsible. Ms. Holmes was convicted on 4 of 11 prices.
The trial for Mr. Balwani, who is called Sunny, lacked the fanfare of Ms. Holmes’s high-profile case. It nonetheless serves as a coda to a waning period of start-up progress that always relied on hype and hyperbole. Ms. Holmes and Mr. Balwani are among the many only a few tech executives who’ve ever been prosecuted for fraud.
Just as Ms. Holmes tried blaming others for the deceptions at Theranos, Mr. Balwani has pointed the finger again at her. Throughout the trial, his attorneys argued that many of Theranos’s blood exams had labored. And they mentioned that Ms. Holmes managed Theranos, not Mr. Balwani. They had been set to start their closing argument in a while Tuesday.
Ms. Holmes, now 38, met Mr. Balwani when she was 18. They started courting years later, after Ms. Holmes had based Theranos. In 2009, Mr. Balwani invested in Theranos and have become its chief working officer, finally taking cost of its lab. The pair stored their relationship a secret and lived collectively in a sprawling residence they co-owned in Atherton, Calif.
In 2016, after Theranos got here underneath fireplace for mendacity about its blood testing capabilities, Mr. Balwani left the corporate and cut up with Ms. Holmes. The pair had been charged with fraud collectively, however Ms. Holmes argued in filings to sever the instances and accused Mr. Balwani of emotional and sexual abuse. Her trial included dramatic testimony recounting the accusations. That topic was excluded from Mr. Balwani’s trial.
To convict Mr. Balwani, prosecutors should persuade jurors that he deliberately lied to buyers and sufferers about Theranos’s blood exams and enterprise dealings.
Prosecutors tried blaming Mr. Balwani for monetary projections that Theranos confirmed to buyers and the situation of its labs. New witnesses included buyers and executives who dealt immediately with Mr. Balwani, somewhat than Ms. Holmes.
One projection, introduced to buyers in October 2014, confirmed Theranos would deliver in $140 million that 12 months. In actuality, income was restricted. The subsequent 12 months, Mr. Balwani projected practically $1 billion in income in pitches to buyers. Theranos’s inside projections had been a lot decrease, proof confirmed, and the fact was nearer to zero.
A brand new witness, Patrick Mendenhall, who dealt immediately with Mr. Balwani whereas investing in Theranos, outlined the guarantees made that turned out to be deceptive or false.
Brian Grossman, an investor on the hedge fund PFM Health Sciences, who was additionally a witness in Ms. Holmes’s trial, testified that Mr. Balwani supplied his staff with monetary projections that far overstated Theranos’s projected income.
“When Mr. Balwani communicates with an investor, it’s for a purpose, and the purpose is to deceive them to get money,” Mr. Schenk mentioned.
Prosecutors additionally emphasised Mr. Balwani’s position in operating Theranos’s lab, which the manager had referred to as a “disaster zone” in a 2014 textual content message used as proof. Mr. Balwani would additionally “remove dissent” by intimidating or pushing out workers who expressed concern about Theranos exams, like Dr. Adam Rosendorff, a former lab director who testified in each trials, Mr. Schenk mentioned
Notably absent from the witness stand had been James Mattis, a former protection secretary and Theranos board member, and Ms. Holmes, who had each testified in Ms. Holmes’s trial. Mr. Balwani didn’t testify in his personal protection.
If convicted, Mr. Balwani and Ms. Holmes can be sentenced collectively in September.