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Ramesh Balwani, the Indian origin ex Theranos top boss, gets 13 years for fraud; who is he?

Ramesh Balwani, the Indian-origin ex-Theranos top boss, gets 13 years for fraud; who is he?

Ramesh Balwani, the Indian-origin ex-Theranos top boss, gets 13 years for fraud; who is he?
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By CNBCTV18.com Dec 8, 2022 11:14:01 AM IST (Published)

Balwani was romantically involved with the now defunct blood-testing company’s founder Elizabeth Holmes and was accused of conspiring to deceive Silicon Valley investors.

Ramesh 'Sunny' Balwani, the former COO and president of Theranos, was sentenced to nearly 13 years in prison for his involvement in an elaborate fraud scheme at the healthcare start-up. Balwani appeared in a US federal court on Wednesday after being convicted of 12 fraud charges of wire fraud and conspiracy to commit wire fraud.

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The conviction of Balwani came after a three-month trial in the federal court in San Jose, California. Prosecutors argued that Balwani conspired with his ex-girlfriend and the founder of Theranos, Elizabeth Holmes, to deceive Silicon Valley investors into believing that the company had achieved miniaturised machines that could accurately run a broad array of medical diagnostic tests with just a few drops of blood.
However, the company continued to secretly rely on traditional methods of blood tests and provided patients with inaccurate results, The Hindu reported.
Holmes was sentenced to 11 years in prison in a separate trial last month.
Who is Ramesh Balwani?
Ramesh ‘Sunny’ Balwani was born in Sindh, Pakistan in 1965. He studied for some time at the boarding school of Aitchison College in Lahore. Balwani’s family later moved to India as per Balwani's lawyer, ABC News said.
Later, Balwani and his family immigrated to the United States, where he pursued computer science at the University of Texas, in 1987. Balwani dropped out and eventually received a bachelor's degree in information systems in 1997.
Balwani started his career in software with Lotus Software and Microsoft. As per the New York Times, he sold Microsoft’s products to other firms. He met Keiko Fujimoto, a Japanese artist while working at Microsoft and married her. The couple divorced in 2002.
Balwani also worked at a start-up called CommerceBid.com as president in 1999, when the dot-com boom peaked. He later sold his shares in the company before the dot-com bubble burst and made about $40 million in 2000.
After that, he went back to school and received a Master of Business Administration from the University of California, Berkeley in 2003. He spent four years at Stanford as well but dropped out in 2008.
Journey at Theranos and relationship with Elizabeth Holmes
Balwani joined Theranos in 2009 as the COO and president of the blood testing start-up.
As per the testimony from his trial, Balwani had enormous power at Theranos as he made decisions about lab practices and policies, controlled access to the lab, hired and fired employees and oversaw financial projections provided to investors, as per a Wall Street Journal report. Balwani and Holmes made decisions in unison about the operations of the company.
According to an investigative report, Bad Blood: Secrets and Lies in a Silicon Valley Startup, by reporter John Carreyrou, Balwani met Holmes in 2002, when she was 18 and he was 37. Their relationship reportedly started when Balwani acted as a mentor to Holmes.
Later, Balwani and Holmes became more than colleagues and were in a romantic relationship which was kept secret from employees, board directors and investors.  They lived together from 2005 to 2016. However, the two broke up in 2016, shortly after things started going downhill for Theranos.
In her testimony, Holmes accused Balwani of emotionally, psychologically, and sexually abusing her for years. However, Balwani’s lawyer denied all allegations of abuse and they did not resurface in Balwani’s trial.
The pair ran the company in tandem and witnessed a meteoric rise as the company was valued at more than $9 billion at a point before its eventual downfall. In September 2018, Theranos finally dissolved. The US government brought the fraud case against the pair in 2018 and a federal judge severed the case in March 2020, leading to separate trials with separate juries.
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