The former Theranos executive Sunny Balwani has been convicted on all 12 fraud charges brought against him for his role at the now-defunct blood testing company.
The decision closes the final chapter of Theranos’s legal saga, nearly eight years after serious concerns were raised about the startup’s blood testing technology. The conviction of Balwani, who at one point oversaw the Theranos lab and put millions of his own fortune into the company, also marks a more severe judgment than that of his former lover and business partner Elizabeth Holmes, who was convicted of only four of 11 of the same charges in January.
Holmes was convicted of defrauding investors but was cleared on charges of defrauding patients, while Balwani was convicted on all charges – including those specific to patients.
Jurors in San Jose, California, announced the decision on Thursday following a 13-week trial that chronicled Balwani’s role in the medical tech firm that promised to revolutionize the world of medicine. The jury, made up of five men and seven women, deliberated for 32 hours before returning a verdict around noon.
The 57-year-old businessman had pleaded not guilty and now faces as many as 20 years in prison. Holmes is out on bail and will be sentenced on 26 September. Balwani will be sentenced on 15 November.
Holmes and Balwani, former business and romantic partners, had vowed to upend the medical testing industry with a blood test that could scan for more than 200 potential health problems with just a few drops of blood, a promise that was later discovered to have little basis in reality.
The company had risen to the top of Silicon Valley with Holmes at the helm, attracting big-name investors including the former secretaries of state George Schultz and Henry Kissinger. At its height, Theranos was valued at more than $9bn.
Its downward spiral began when in 2015, Wall Street Journal reporting aided by company whistleblowers revealed in-house tests had serious inaccuracies and that the company was performing other tests using traditional blood drawing methodology and outside labs.
Throughout his trial, federal prosecutors depicted Balwani as a willing accomplisher to the fraud spearheaded by Holmes. Lawyers called on witnesses including investors and executives who said Balwani shared false financial projections about the viability of the company.
“Mr Balwani is not a victim. He is the perpetrators of the fraud,” prosecutor Jeffrey Schenk said near the end of his three-and-a-half-hour closing arguments.
Prosecutors also displayed texts from Balwani to Holmes in which he said: “I am responsible for everything at Theranos. All have been my decisions too.”
Defense attorneys depicted Balwani as a loyal soldier who under the direction of Holmes tried to save the blood-testing company.
Balwani, who met Holmes when she was 19 and he was 38, put $15m of his own funds into Theranos between 2009 and 2011, “because he believed in Holmes’s vision”, his lawyers said. He also acted as chief operating officer of the company from 2010 to 2016, when the company was broken up.
In his own trial, Holmes accused Balwani of abuse – charges he strongly denied.
The guilty verdicts for both Holmes and Balwani have been seen as an indictment of the tech industry, and the end of an era in which companies can ride unchecked hype backed by little substance to large amounts of funding. Prosecutors underscored throughout the trial the real-world impact of Theranos, including tests that inaccurately told patients they were experiencing miscarriages or cancer.
“The story of Theranos is a tragedy,” Schenk said in closing arguments.