Elizabeth Holmes’ ex-lover Ramesh Balwani sentenced to nearly 13 years for role in Theranos scandal

Balwani was convicted in July of fraud and conspiracy connected to the company’s bogus medical technology that duped investors and endangered patients. His sentencing came less than three weeks after Elizabeth Holmes, the company’s founder and CEO, received more than 11 years in prison for her part in the scheme, which has been dissected in a book, HBO documentary and award-winning TV series.

Balwani’s sentence was less than the 15 years sought by federal prosecutors, who depicted him as a ruthless, power-hungry figure. But it is substantially longer than the four to 10 months sought by his lawyers.

The scandal revolved around the company’s false claims to have developed a device that could scan for hundreds of diseases and other potential problems with just a few drops of blood taken with a finger prick.

After years of promoting the technology, Holmes and Balwani were warned that the blood tests were inaccurate, but they continued to raise money from investors, including from billionaires such as software magnate Larry Ellison and media magnate Rupert Murdoch, and deployed the technology in some Walgreens stores.

U.S. District Judge Edward Davila said the financial statements drawn up by Balwani “weren’t just projections, they were lies” and “a true flight from honest business practices.”

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.

Both Holmes, 38, and Balwani, 57, could have gotten up to 20 years in prison. Balwani spent six years as Theranos’ chief operating officer while remaining romantically involved with Holmes until a bitter split in 2016.

Former federal prosecutor Amanda Kramer said the harsher sentence seemed appropriate, given that the jury in Balwani’s trial convicted him on every count while jurors in Holmes’ separate case acquitted her on some charges and deadlocked on others.

“It’s not surprising that he got a more severe sentence because his misconduct was was more severe,” Kramer said.

While on the witness stand in her trial, Holmes accused Balwani of manipulating her through years of emotional and sexual abuse. Balwani’s attorney has denied the allegations.

Federal prosecutors also want the judge to order Balwani to pay $804 million in restitution to defrauded investors — the same amount sought from Holmes. Davila deferred a decision on restitution to a later hearing, just as he did during Holmes’ Nov. 18 sentencing, when she received 11 1/4 years in prison.

In court documents, Balwani’s lawyers painted him as a hardworking immigrant who moved from India to the U.S. during the 1980s to become the first member of his family to attend college. He graduated from the University of Texas in 1990 with a degree in information systems.

He later moved to Silicon Valley, where he first worked as a computer programmer for Microsoft before founding an online startup that he sold for millions of dollars during the dot-com boom of the 1990s.

Balwani and Holmes met around the same time she dropped out of Stanford University to start Theranos in 2003. He became enthralled with her and her quest to revolutionize health care.

Balwani’s lawyers said he eventually invested about $5 million in a stake in Theranos that eventually became worth about $500 million on paper — a fraction of Holmes’ one-time fortune of of $4.5 billion.

That wealth evaporated after Theranos began to unravel in 2015 amid revelations that its blood-testing technology never worked as Holmes had boasted in glowing magazine articles that likened her to Silicon Valley visionaries such as Apple co-founder Steve Jobs.

Before Theranos’ downfall, Holmes teamed up with Balwani to raise nearly $1 billion from deep-pocketed investors.

“Mr. Balwani is not the same as Elizabeth Holmes,” his lawyers wrote in a memo to the judge. “”He actually invested millions of dollars of his own money; he never sought fame or recognition; and he has a long history of quietly giving to those less fortunate.” Balwani’s lawyers also asserted that Holmes “was dramatically more culpable” for the Theranos fraud.

Echoing similar claims made by Holmes’s lawyers before her sentencing, Balwani’s attorneys also argued that he has been adequately punished by the intense media coverage of Theranos.

Balwani “has lost his career, his reputation and his ability to meaningfully work again,” his lawyers wrote.

Federal prosecutors cast Balwani as a ruthless, power-hungry accomplice in crimes that ripped off investors and imperiled people who received flawed results. The blood tests were to be available in a partnership with Walgreen’s that Balwani helped engineer.

“Balwani presented a fake story about Theranos’ technology and financial stability day after day in meeting after meeting,” the prosecutors wrote in their memo to the judge. “Balwani maintained this façade of accomplishments, after making the calculated decision that honesty would destroy Theranos.”