Elizabeth Holmes was a star entrepreneur whose blood-testing start-up trial to deceive investors became Silicon Valley’s biggest spectacle after the introduction of the iPhone. Her conviction in January marks a rare moment in the proud history of technology: a chief executive was found guilty of lying.
For most of her trials, Ms. Holmes tried to blame his deputy and ex-boyfriend Ramesh Balwani for what went wrong at his company, Theranos. Now Mr. Balwani, also known as Sunny, will have a chance to respond in a fraud case. The jury’s selection was set to begin Wednesday in the same federal courtroom in San Jose, California, where Ms. Holmes’s fate was decided.
The first offers a trial, and the second a trial, a closer look at the unusual relationship between a young woman and an old man. Ms. Holmes and Mr. Balwani had a secret romance that was also a professional connection, an exciting promise to improve health care for millions of people who put patients at risk. His blood test didn’t work, though he thought newer and better technology would save him from his reckless claims.
Mr. Balwani, 57, is a former software executive who made a fortune during the dot-com boom in the late 1990s. He is Ms. Befriended Holmes was studying in China in the summer before his new year at Stanford University. Due to their romantic relationship, he joined Theranos in 2009 as president and chief executive officer.
It was the opposite of a star, rarely mentioned by Ms. Holmes and Theranos. Through all the evidence, however, Mr. Balwani and Ms. Holmes, now 38, was a team that ruled the start-up tight. Few knew they were in a relationship.
“She was Oz’s wizard, dazzling investors and the media, but she was working the machinery behind the scenes,” said Reed Catherine, a San Francisco lawyer who successfully sued Ms. Holmes and Theranos in 2016 on behalf of investors. He said he was confident the prosecution would show that “he knew she was lying and never stopped her.”
“He knew everything,” said Mr. Said Catherine.
Mr. Balwani’s trial will take place on known land. He faces the same 12 charges that Ms. Holmes faced early. (A count was dropped after a procedural error by the government.) He has pleaded not guilty.
Ms. Holmes was convicted of four counts of cheating with investors and was acquitted of four counts of cheating patients; The jury struck down the accounts of the other three investors. She will be sentenced in the fall.
Following this case, the consensus among legal experts is that Ms. Holmes will promote it in Mister. Rebellion trial.
Representing corporate clients, former federal prosecutor James Melendres said, “The government has the opportunity to do the full job, so they must have learned what worked and what didn’t.”
The epic rise and fall of Elizabeth Holmes
The story of the founder of Theranos, ranging from the 9 billion valuation to the punishment for fraud, symbolizes the difficulties of Silicon Valley culture.
Plaintiff, Shri. Balwani and his lawyers declined to comment. Ms. by her lawyers. Holmes declined to comment.
When Ms. Holmes’s background has been extensively documented, Mr. Why is it called Sunny, including Balwani.
An experienced software executive, he was fortunate enough to have his start-up bought by a large company before the stock market crash of 2000, earning him about $ 40 million. He divorced, went back to school to do an MBA and study computer science, and bought a fancy car. (In the nod to Karl Marx, his license plate was DASKPTL.) When he joined Theranos, he had invested millions of rupees in it, his lawyers said.
At Theranos, he had a reputation for demanding harsh, bosses who became increasingly paranoid that employees would steal trade secrets that were supposed to revolutionize blood testing. In an incident described by journalist John Carrero, Mr. Balwani called police to chase the departing employee, explaining that the former worker “steals property in his mind.”
Mr. Proponents of her case have been working to make the actual transcript of this statement available online. Legal experts said he was unlikely to testify. He will probably have less sympathy than Mrs. on the witness stand. Holmes, a new mother who played her youth and reached the court holding the hand of her mother and her spouse.
“It’s not optics in his favor,” said Ann Kim, a former federal prosecutor who represents companies that are going through a government investigation.
When Ms. Holmes took a stand in her defense, she tried to correct the story surrounding her spectacular fall, to present a bombshell of abuse against Mr. He denied the allegations, and the text messages released during the trial showed more or less similar relationships, especially when the company came under pressure from whistle-blowers and the media.
“The whole thing we have to answer to lies is ridiculous,” Ms. Holmes got angry in a message. Mr. Balwani vowed to take revenge on his accused: “We will also take legal action when this is behind us.”
At the heart of the government’s investigation into both defendants is the argument that they proceeded from the hype – as common as breathing in Silicon Valley – to fraud.
Ms. Holmes can create an alternative reality with the instinctive simplicity of his role model, Apple co-founder Steve Jobs. Witnesses at her trial testified that she convinced people that she would change the world. Investors have invested about $ 1 billion in Theranos.
Mr. Balwani, like most dull humanity, had no such gift. There is only one video of him online, but it reveals his style.
In March 2014, while Theranos was launching its finger-prick blood testing system in Walgreens, Arizona, Mr. Balwani gave a presentation on “Healthcare Innovation” before the Arizona Senate Health and Human Services Committee. He didn’t originally have to do that – Ms. Holmes had to cancel – and it didn’t look like he was enjoying himself.
Mr. Balwani told lawmakers the company was “working on something we believe is magical.” He talked about a certain patient who had “no limbs.” When the man had to donate blood, the needle went into his throat. At the Theranos Clinic, however, “a small organ was attached to her body” and “we were able to point a finger at her.”
It is not explained how a person without a limb suddenly got a limb. It was almost as if Mr. Balwani dared to show the senators that Theranos literally had a magical mindset.
They were not. Instead, they saluted him.
“I like bringing a free market into our health care system,” said Republican Senator Kelly Ward, who noted that she is a family doctor.
(Senator Ward is now chairman of the State Republican Party and has been active in efforts to overturn the local election results in favor of President Trump. “It is now more clear that we need to let the free market work,” she said in an email.)
Neither the plaintiff nor the defense has filed a final list of witnesses for Mr. Rebellion trial. In December, prosecutors filed their proposed questionnaire for potential jurors, including a list of preliminary witnesses.
A handful of potential witnesses from the Holmes trial were struck for obvious reasons, including Ms. Holmes’ mother, Noel, and former Secretary of State Henry Kissinger, a member of the Theranos Board. Mindy the mechanic, an expert witness on the Holmes team’s domestic abuse who eventually did not take a stand, was also removed. Mr. Balwani’s legal team named experts in forensic accounting, intellectual property and SQL databases.
A potential witness would make headlines for the government. Ms. Holmes, however, is highly unlikely to testify, even if doing so could reduce her prison sentence.
“She’s likely to fight this to the end of the earth,” said Jane Kennedy Park, a white-collar defense attorney.