Theranos executive No. 2 found guilty of 12 counts of fraud

The verdict of Ramesh Balwani, who helped run the failed blood testing startup, was harsher than that of his ex-girlfriend Elizabeth Holmes.

SAN JOSE, Calif. — Ramesh Balwani, a former senior executive at Theranos, was convicted on Thursday of 12 counts of fraud, in a harsher verdict than that of his co-conspirator, Elizabeth Holmes, and which solidified the failed blood-testing startup as the ultimate Silicon Valley cautionary tale.

Mr. Balwani and Ms. Holmes, who together pushed Theranos to great heights with the promise of revolutionizing healthcare, are the most prominent technology leaders to be accused and convicted of fraud in a generation. A jury of five men and seven women took 32 hours to reach a verdict, convicting Mr. Balwani, known as Sunny, of the 10 counts of wire fraud and the two counts of conspiracy to commit wire fraud .

In January, Ms. Holmes was convicted of four counts of fraud and acquitted of four counts of fraud. Three other charges were dismissed after the jury could not reach a consensus. She appealed the verdict and Mr. Balwani is expected to do the same.

Both of their cases hinged on whether they overdid the capabilities of the test machines blood from Theranos. in order to seduce investors and customers, when the products did not actually work.

Each count carries a maximum sentence of 20 years in prison . Ms Holmes is expected to be sentenced in September and Mr Balwani in November.

As the guilty verdicts fell, Mr. Balwani, 57, who appeared in court in a black suit and blue medical mask, briefly threw a glance at the front jury fixing his gaze straight ahead. One of his lawyers, Jeffrey Coopersmith, said in a statement that his team was "obviously disappointed" with the verdicts and that Mr Balwani would consider all his options, including appeal.

In a prepared statement outside the courtroom, Stephanie Hinds, a U.S. attorney, said her office appreciated the verdict and thanked the jury for "dutifully navigating through through the complex issues presented by this case".

< p class="css-at9mc1 evys1bk0">Double guilty verdicts are a rare example of the Silicon Valley hype machine leading to a possible jail. Since Theranos' collapse in 2018, the company has become a form of shorthand for business scammers, and the world has developed a voracious appetite for messy start-up start-up and crash stories, such as the WeWork's disastrous first attempt to go public and Ozy Media's deception. But Theranos was the only one to bring criminal charges. The consequences its leaders faced are likely to send a message to entrepreneurs who exaggerate in the name of innovation.

The verdict showed that jurors were influenced by prosecutors' evidence that Mr. Balwani knew about problems with Theranos' technology and business while misleading investors and patients. Mr. Balwani had attempted to deflect blame by arguing that Ms. Holmes – as CEO and founder of Theranos – was responsible, and by arguing that he had believed in Theranos' mission and technology.

< p class="css -at9mc1 evys1bk0">Mr. Balwani “has put his heart and soul into Theranos,” Mr. Coopersmith said in his