Closing Statements Begin in Trial of Sunny Balwani

For months, Ramesh Balwani’s attorneys have tried to tell apart him from Elizabeth Holmes, his former girlfriend and enterprise accomplice on the failed blood-testing firm Theranos.

Ms. Holmes was discovered responsible of defrauding the start-up’s traders in January. Mr. Balwani is searching for a special 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. legal professional 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’m accountable for every little thing at Theranos,” Mr. Balwani wrote. “All have been my choices too.”

The textual content message was an admission of guilt, Mr. Schenk mentioned, including, “He’s acknowledging his function 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, have been charged in 2018 for exaggerating the capabilities of Theranos’ blood-testing machines and enterprise efficiency when, in reality, the merchandise didn’t work and its enterprise was struggling. The duo pleaded not responsible. Ms. Holmes was convicted on 4 of 11 expenses.

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’ blood assessments had labored. And they mentioned that Ms. Holmes managed Theranos, not Mr. Balwani. They have been set to start their closing argument in a while Tuesday.

Ms. Holmes, now 38, with 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, ultimately taking cost of its lab. The couple saved their relationship a secret and lived collectively in a sprawling dwelling 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 break up with Ms. Holmes. The pair have been charged with fraud collectively, however Ms. Mr. Holmes argued in filings to sever the circumstances 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 traders and sufferers about Theranos’ blood assessments and enterprise dealings.

Prosecutors tried blaming Mr. Balwani for monetary projections that Theranos confirmed to traders and the situation of its labs. New witnesses included traders and executives who dealt immediately with Mr. Balwani, slightly than Ms. Holmes.

One projection, introduced to traders in October 2014, confirmed Theranos would carry in $ 140 million that yr. In actuality, income was restricted. The subsequent yr, Mr. Balwani projected almost $ 1 billion in income in pitches to traders. Theranos’ inside projections have 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’ trial, testified that Mr. Balwani offered his staff with monetary projections that far overstated Theranos’ projected income.

“When Mr. Balwani communicates with an investor, it is for a goal, and the aim is to deceive them to get cash, ”Mr. Schenk mentioned.

Prosecutors additionally emphasised Mr. Balwani’s function in operating Theranos’ lab, which the manager had known as a “catastrophe zone” in a 2014 textual content message used as proof. Mr. Balwani would additionally “take away dissent” by intimidating or pushing out workers who expressed concern about Theranos assessments, like Dr. Adam Rosendorff, a former lab director who testified in each trials, Mr. Schenk mentioned

Notably absent from the witness stand have 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 shall be sentenced collectively in September.

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