US Jury Convicts Theranos' Sunny Balwani of Fraud

By Jody Godoy

July 07, 2022

July 7 (Reuters) — A U.S. jury on Thursday convicted former Theranos Inc President Ramesh "Sunny" Balwani of defrauding investors and patients about the blood testing startup that was once valued at $9 billion.

Balwani was convicted on two counts of conspiracy and 10 counts of fraud, a spokesman for the U.S. attorney said.

Balwani's attorney Jeffrey Coopersmith said the defense was "obviously disappointed with the verdicts" and would consider all options including an appeal.

The jury in San Jose, California, handed down its verdict after deliberating for a little more than five days.

Theranos founder Elizabeth Holmes, who initially faced the same charges, was convicted on three counts of fraud and one count of conspiracy at a separate trial in January.

Balwani and Holmes were charged in 2018 with lying to investors about the company's finances and its machines' ability to run a broad range of tests from a few drops of blood. Prosecutors also charged the pair with duping patients about the tests' accuracy.

They were granted separate trials after Holmes said she would testify that Balwani was abusive towards her in their romantic relationship. Balwani denied the allegations.

Theranos investors were drawn to Holmes, with her deep, authoritative voice, black Steve Jobs-esque turtleneck and her promise to upend the laboratory testing industry by creating portable machines that could run a broad array of tests.

The company touted work with drugmakers, pharmacies and the U.S. military and received investments from media mogul Rupert Murdoch.

Theranos collapsed after the Wall Street Journal published a series of articles, starting in 2015, that suggested its devices were flawed and inaccurate.

At trial, Holmes made the somewhat unusual decision to testify in her own defense and denied lying to investors.

She is scheduled to be sentenced on Sept. 26. She has argued that the evidence was insufficient to support the verdict.

Reporting by Jody Godoy in New York; Editing by Noeleen Walder and Howard Goller