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Jury takes on fraud case against Elizabeth Holmes’ ex-partner | Tech News

By MICHAEL LIEDTKE – AP Technology Writer

SAN JOSE, Calif. (AP) — The fate of hard-nosed technology executive Ramesh “Sunny” Balwani is now in the hands of a jury to weigh criminal charges alleging he joined the disgraced CEO of Theranos, Elizabeth Holmes, his former partner, in an elaborate fraud that rocked Silicon Valley.

U.S. District Judge Edward Davila handed the case over to the jury on Friday afternoon after federal prosecutors in San Jose, Calif., completed a rebuttal of more than 11 hours of methodically delivered closing arguments by one of the attorneys. of Balwani, Jeffrey Coopersmith.

The jury will weigh testimony, emails, salacious texts and other evidence submitted during a three-month trial as they sort through the 12 counts of fraud and conspiracy filed against Balwani for his role at Theranos, a blood testing company founded by Holmes. when she was only 19 years old.

Balwani, 57, began dating Holmes, now 38, around the same time she dropped out of Stanford University in 2003 to found her startup. He helped Holmes behind the scenes until 2010 when he became COO of Theranos while living with Holmes. The couple separated in 2016 when Theranos began to crumble amid revelations of serious issues with Theranos technology that they had hidden from investors and patients.

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A separate jury spent seven days deliberating over the evidence in Holmes’ trial before convicting her of four counts of fraud and conspiracy against investors and acquitting her of four counts of fraud and conspiracy against patients earlier this year. She could be sentenced to 20 years in prison by Davila during a hearing scheduled for the end of September. The jury in Balwani’s trial is aware of Holmes’ conviction but has been instructed to disregard it in their deliberations.

The case revolves around allegations that Holmes and Balwani deceived investors and patients about a Theranos blood test technology that they boasted would revolutionize healthcare and generate huge profits.

But the blood tests never worked consistently as Holmes and Balwani promised, even when high-profile investors such as Silicon Valley billionaire Larry Ellison and media mogul Rupert Murdoch poured nearly a billion dollars in Theranos. Meanwhile, Theranos was running tests of its technology through a partnership with Walgreens that provided inaccurate results to patients that threatened to compromise their health.

In 2014, the Theranos holdings of Holmes and Balwani were together worth $5 billion. Holmes, who has been Theranos’ star attraction and chief visionary, owned $4.5 billion of that amount, with the rest owned by Balwani, who oversaw the company’s day-to-day operations with an at times abrasive management style. .

All that wealth evaporated once it became known that Theranos’ technology did not deliver on Holmes’ brash promises. The fall transformed Theranos — and the couple who once ran it — from a Silicon Valley sensation into a cautionary tale of how horribly things can spiral out of control when ambitious entrepreneurs exaggerate the capabilities of fledgling technology.

Federal prosecutors have provided evidence showing Balwani grossly exaggerated Theranos revenue projections that helped Holmes woo investors while overseeing the company’s lab and covering up faulty patient blood tests.

“The plan here was not to get caught,” federal prosecutor John Bostic told the jury on Friday. “The plan wasn’t for the company to go bankrupt. The plan was to get away with it.”

To underscore Balwani’s influential role, prosecutors used their closing arguments to highlight a July 2015 text he sent to Holmes. “I’m responsible for everything at Theranos,” Balwani reminded Holmes. “All were my decisions too.”

Balwani’s lawyers countered by describing him as a loyal soldier who not only pledged around $15 million of his own money to help support Theranos from 2009 to 2011, but also a tireless worker focused on everything to help Holmes achieve her goals. They also insisted that Balwani had fallen under the same spell as Holmes by courting investors and winning over powerful men such as former US Secretary of State George Schultz and former US Secretary of Defense James Mattis. to join the Theranos Board of Directors.

Holmes “must certainly be as charismatic a person as possible,” Coopersmith, Balwani’s attorney, told the jury at one point during closing arguments that took place over three days this week.

In his rebuttal, Bostic argued that Holmes relied heavily on Balwani’s advice because he was older and more experienced than her, having previously sold a startup that made him wealthy.

“They were partners in every sense of the word,” Bostic said of Holmes and Balwani.

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