Closing Arguments Made in Trial of Elizabeth Holmes’s Ex-Boyfriend


For months Ramesh Balwanilawyers tried to distinguish him from Elizabeth Holmeshis former girlfriend and business partner at the failed Theranos blood testing company.

Miss Holmes was was found guilty cheating startup investors in January. Mr Balwani is looking for a different outcome in his own fraud trial.

But on Tuesday, in Mr. Balwani’s final jury appearances, prosecutors linked him directly to Ms. Holmes and the Theranos years-long fraud. Jeffrey Schenk, Assistant U.S. Attorney and lead prosecutor on the case, showed a text message Mr Balwani sent to Ms Holmes in 2015 that was used as evidence in court.

“I am responsible for everything at Theranos,” Balwani wrote. “All the decisions were mine too.”

The text was an admission of guilt, Mr. Schenk said, adding: “He admits his role in the fraud.”

The presentation concluded more than three months of testimony at Mr. Balwani’s trial, which largely mirrored Ms. Holmes’ final fall. In 2018, she and Mr Balwani, 57, were charged with exaggerating the capabilities of Theranos blood testing machines and business performance when in fact the products didn’t work and the business failed. The couple pleaded not guilty. Miss Holmes was convicted on four of the 11 counts.

The trial of Mr. Balwani, known as Sunny, passed without any fanfare for Ms. Holmes’s case. However, it serves as a code for The fading era of startup growth it often relied on hype and hyperbole. Ms. Holmes and Mr. Balwani are among the few technical leaders who have ever been prosecuted for fraud.

Just as Ms. Holmes tried to accuse others of cheating at Theranos, Mr. Balwani pointed the finger at her. Throughout the trial, his lawyers argued that many of Theranos’ blood tests had worked. They said that Ms. Holmes, not Mr. Balwani, was in control of Theranos. And on Tuesday, they portrayed Mr. Balwani as a true believer in Theranos vision and technology.

Mr. Balwani “put his heart and soul into Theranos,” said Jeffrey Coopersmith, who represents him. “He worked tirelessly, year after year, to make the company a success.”

Miss Holmes, now 38, met Mr Balwani when she was 18. They started dating many years later, after Ms. Holmes founded Theranos. Mr. Balwani joined Theranos in 2009, became its COO and eventually invested $4.6 million in the company and led its lab. The couple kept their relationship a secret and lived together in a large house they jointly owned in Atherton, California.

In 2016, after Theranos was criticized for lying about its blood testing abilities, Mr. Balwani left the company and parted ways with Ms. Holmes. The couple were accused of cheating together, but Ms Holmes in the papers insisted on separating cases and accused Mr Balwani of emotional and sexual abuse. Her trial included dramatic testimony retelling the allegations. This issue was excluded from Mr. Balwani’s trial.

To convict Mr. Balwani, prosecutors must convince jurors that he deliberately lied to investors and patients about Theranos’ blood tests and business dealings.

Prosecutors tried to blame Mr. Balwani for the financial forecasts Theranos provided to investors and the state of its labs. The new witnesses included investors and executives who dealt directly with Mr Balwani, not Ms Holmes.

One forecast presented to investors in October 2014 indicated that Theranos would bring in $140 million this year. In fact, the proceeds were $150,000. The following year, Mr. Balwani predicted nearly $1 billion in revenue from investor presentations. According to the evidence, Theranos’ internal projections were much lower, when in fact they were $429,210.

Mr Schenck said Theranos executives have instructed their scientists to review blood tests and only start offering tests to the public when they need money from investors or clients. “No, when the science was ready,” he said.

A new witness, Patrick Mendenhall, who dealt directly with Mr. Balwani in investing in Theranos, laid out promises that turned out to be misleading or false.

Brian Grossman, an investor in hedge fund PFM Health Sciences who was also a witness at Ms. Holmes’s trial, testified that Mr. Balwani provided his team with financial projections that far exceeded Theranos’ projected earnings.

“When Mr. Balwani communicates with an investor, he has a goal, and the goal is to deceive him in order to get money,” Mr. Schenk said.

Prosecutors also highlighted Mr. Balwani’s role in running the Theranos lab, which the chief described as a “disaster zone” in a 2014 text message. Mr. Balwani will also “eliminate dissent” by intimidating or pushing out employees who expressed concerns about Theranos tests, such as Dr. Adam Rosendorf, a former lab director who testified in both trials, Mr. Schenck said.

Mr. Coopersmith, defense attorney, said the government painted a “grossly misleading” picture of Mr. Balwani’s stay at Theranos and that it was unfair to show private texts taken out of context as evidence of a conspiracy.

According to Mr. Coopersmith, the reports do not show that Mr. Balwani told anyone about the scam. “If there was a conspiracy, you would think there would be all sorts of conspiratorial, sinister conversations, but there just isn’t,” he said.

Notably, James Mattis, a former secretary of defense and board member of Theranos, and Ms. Holmes, who both testified at Ms. Holmes’s trial, were not present at the witness stand. Mr. Balwani did not testify in his defense.

If found guilty, Mr Balwani and Ms Holmes will be convicted together in September.

Erin Wu made a report.


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