SAN JOSE, Calif. (KRON) — A judge on Wednesday sentenced former Theranos executive Ramesh “Sunny” Balwani to nearly 13 years in prison for his role in the company’s blood-testing fraud.
His sentence was two years longer than that given to his co-conspirator and former lover, Elizabeth Holmes, for one of the biggest scandals in Silicon Valley’s history.
U.S. District Judge Edward Davila sentenced Balwani to serve 155 months in prison. Holmes, who was convicted on four counts, was previously sentenced by Davila to serve 135 months in prison. Balwani received a longer prison sentence because he was convicted on 12 counts.
Balwani, 57, of Fremont, was not immediately taken into custody. Judge Davila ordered Balwani to begin serving his sentence on March 15.
Holmes’ first day of prison is slated for April 27 because the judge granted her request to give birth out of custody. Holmes appeared to be between 6-8 months pregnant at her sentencing hearing on November 18.
The duo defrauded sophisticated investors out of hundreds of millions of dollars with promises of revolutionizing healthcare. Balwani put patients’ lives in danger by misrepresenting the accuracy of Theranos blood analysis technology.
Balwani was directly in charge of Theranos’ blood lab, finances, and silencing whistleblowers who questioned the company’s technology.
Judge Davila said glowing financial profit projections drawn up by Balwani “weren’t just projections, they were lies” and “a true flight from honest business practices.”
While Balwani worked behind-the-scenes, Holmes became a Silicon Valley superstar and America’s youngest self-made billionaire. The case threw a bright light on Silicon Valley’s dark side, exposing how its culture of hype and boundless ambition could veer into lies.
U.S. Attorney Stephanie M. Hinds said Wednesday, “Ramesh Balwani, in a desire to become a Silicon Valley titan, valued business success and personal wealth far more than patient safety. He chose deceit over candor with patients in need of medical care, and he treated his investors no better. Today’s sentence should serve as a lesson to anyone considering fraud in their own push for success.”
Balwani and Holmes met around the same time she dropped out of Stanford University to start Theranos in 2003.
Balwani joined Theranos in 2009 as its president and COO. “He had no medical degree, no experience in blood testing, building medical devices, or running a lab. What he did have was a connection to Holmes. Balwani was her romantic partner,” prosecutor Robert Leach said. “They ran the company together. They were partners in everything, including their crimes.”
“The scheme brought them fame, adoration, and comparison to companies like Microsoft and other unicorn technology companies,” Leach said.
Balwani was employed by Theranos from September 2009 through July 2016 holding the positions of board member, chief operating officer and president. Private text messages that Balwani wrote to Holmes haunted his trial.
In February of 2015, when their company was on the brink of collapsing, Balwani texted to Holmes, “I am responsible for everything at Theranos. All have been my decisions too.”
Trial evidence showed the fraud brought spectacular personal wealth to Holmes and Balwani. Balwani owned nearly 30 million shares of Theranos worth hundreds of millions of dollars at the peak of the fraud. The government’s sentencing memo points out that, like Holmes, “Balwani enjoyed the perks of serving as a Silicon Valley titan.”
Balwani’s sentence was less than the 15 years sought by federal prosecutors, who depicted him as a ruthless, power-hungry figure.
Judge Davila has not yet made rulings over how much restitution Balwani and Holmes will be ordered to pay their victims. Federal prosecutors want the judge to order Balwani to pay $804 million in restitution — the same amount sought from Holmes.
Davila said he will make decisions on restitution at future court hearings.
The Associated Press contributed to this report.