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Theranos executive Ramesh “Sunny” Balwani was found guilty of 12 federal charges of criminal fraud on Thursday, making him the second-highest-ranking leader of the defunct blood test company convicted of misleading investors about their failed technology.
A California jury in San Jose agreed with prosecutors that Balwani, 58, was involved in the investor scam in an elaborate scheme with Theranos founder and president Elizabeth Holmes, his ex-girlfriend.
Holmes was convicted in January on one charge of conspiracy and three counts of fraud for her role in the scam. She was initially charged with 11 charges, and the jury was unable to reach a verdict on three of them.
Sunny Balwani, former president of Theranos Inc., arrives at the federal court in San Jose, California, USA, on Wednesday, June 29, 2022. Balwani faces ten charges of electronic fraud, two of conspiracy to commit it. (Photographer: David Paul Morris / Bloomberg via Getty Images / Getty Images)
Holmes, 37, launched the company in 2003 at the age of 19 after leaving Stanford University. It dazzled Silicon Valley and investors with claims that it had developed a revolutionary technology that could diagnose more than 200 diseases with just a few drops of a patient’s blood.
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Balwani became Theranos ’chief operating officer in 2010, serving as Holmes’ deputy and investing $ 15 million of his own funds in the business. The couple had been dating for years before joining the company, but kept their romance a secret.
Elizabeth Holmes, CEO of Theranos and the world’s youngest female billionaire, in an interview on September 29, 2015 (David Orrell / CNBC / NBCU Photo Bank / NBCUniversal via Getty Images / Getty Images)
Investors invested more than $ 900 million in Theranos, making Holmes a billionaire on paper at the company’s high point. But things started to fall apart in 2015 after The Wall Street Journal exposed that Theranos was actually using traditional blood test machines to test instead of its own technology.
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The following year, Holmes left Balwani as a business partner and lover. The company closed in 2018, the same year they were both charged.
During his trial, Holmes took the position and blamed Balwani, saying he had deceived him about the effectiveness of Theranos’ technology. He also accused him of emotional and sexual abuse, claims he denied.
Theranos founder and former CEO Elizabeth Holmes undergoes a security check when she arrives for trial at the Robert F. Peckham Federal Building on November 17, 2021 in San Jose, California. (Justin Sullivan / Getty Images / Getty Images)
Balwani did not speak in his own defense during his trial, where his lawyers portrayed him as a benevolent investor who became embroiled in Holmes’ plan. Prosecutors argued that Balwani was an active participant in the fraud, which helped Holmes deceive investors.
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Holmes is expected to be convicted this fall, and the date of Balwani’s sentencing has not yet been set. Both face up to 20 years in prison.
The Associated Press contributed to this report.