SAN JOSE, Calif. — A federal 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 hoax.
Balwani, 58, was convicted in July on 10 counts of wire fraud and two counts of conspiracy to commit wire fraud, The New York Times reported.
Judge Edward J. Davila of the U.S. District Court for the Northern District of California sentenced Balwani to 12 years, 11 months and three years of supervised release, according to the newspaper. That was longer than the 11-year, three-month handed down last month to Theranos CEO and founder, 38-year-old Elizabeth Holmes.
“There is an unfortunate saying in Silicon Valley: ‘Fake it ‘til you make it.’ Elizabeth Holmes and Sunny Balwani stretched this idea to a place much farther than the law allows and in so doing put vast amounts of investor dollars at risk,” Stephanie Hinds, U.S. Attorney for the Northern District of California, said in a statement. “Significantly, today the court also made clear that Sunny Balwani’s decision to deceive doctors and patients also put the health of patients at risk. Ms. Holmes and Mr. Balwani now will be justly punished for their illegal conduct.
“Let this story be a cautionary tale for entrepreneurs in this district: Those who use lies to cover up the shortfalls of their promised accomplishments risk substantial jail time.”
The scandal revolved around the company’s false claims of developing a device that could scan for hundreds of diseases and other potential medical problems with a few drops taken from a finger prick, The Associated Press reported.
Theranos raised $945 million with its promise, CNN reported. At its peak, the company was valued at $9 billion, according to the cable news outlet. Some of the investors included billionaires Larry Ellison and Rupert Murdoch, according to the AP.
The Wall Street Journal reported in 2015 that the tests by Theranos did not work as advertised. The newspaper reported that Theranos had only performed roughly a dozen of the hundreds of tests it offered using its proprietary technology, according to CNN. It was also discovered that Theranos was relying on third-party manufactured devices from traditional blood testing companies, rather than its own technology.
Balwani left the company in 2016, the Times reported. Theranos closed in September 2018.
Balwani plans to appeal, the Times reported. His lawyers asked for him to be assigned to a minimum-security satellite camp in Lompoc, California.
Jeffrey Coopersmith, an attorney for Balwani, blamed Holmes, who was not found guilty of defrauding patients, according to the newspaper.
“She was the CEO. She was the face of Theranos,” Coopersmith said.
Balwani, who appeared in court with family members, did not read a statement to the judge, the Times reported.
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