For months, Ramesh Balwani’s legal professionals have attempted to differentiate him from Elizabeth Holmes, his former female friend and industry spouse on the failed blood-testing corporate Theranos.
Ms. Holmes used to be discovered to blame of defrauding the start-up’s traders in January. Mr. Balwani is looking for a distinct result in his personal fraud trial.
However on Tuesday, in last arguments to Mr. Balwani’s jury, prosecutors tied him immediately to Ms. Holmes and the yearslong fraud at Theranos. Jeffrey Schenk, an assistant U.S. lawyer and a lead prosecutor within the case, displayed a textual content message that Mr. Balwani had despatched Ms. Holmes in 2015 and that were used as proof within the trial.
“I’m chargeable for the whole thing at Theranos,” Mr. Balwani wrote. “All were my choices too.”
The textual content used to be an act of contrition, Mr. Schenk mentioned, including, “He’s acknowledging his position within the fraud.”
The presentation capped greater than 3 months of testimony in Mr. Balwani’s trial, which in large part reflected Ms. Holmes’s closing fall. She and Mr. Balwani, 57, have been charged in 2018 with exaggerating the talents of Theranos’s blood-testing machines and industry efficiency when, if truth be told, the goods didn’t paintings and its industry used to be suffering. The pair pleaded no longer to blame. Ms. Holmes used to be convicted on 4 of eleven fees.
The trial for Mr. Balwani, who’s referred to as Sunny, lacked the fanfare of Ms. Holmes’s case. It however serves as a coda to a waning technology of start-up expansion that continuously trusted hype and hyperbole. Ms. Holmes and Mr. Balwani are a few of the few tech executives who’ve ever been prosecuted on fraud fees.
Simply as Ms. Holmes attempted blaming the deceptions at Theranos on others, Mr. Balwani has pointed the finger again at her. All over the trial, his legal professionals argued that a lot of Theranos’s blood assessments had labored. They mentioned Ms. Holmes, no longer Mr. Balwani, had managed Theranos. And on Tuesday, they painted Mr. Balwani as a real believer within the imaginative and prescient and era of Theranos.
Mr. Balwani “put his center and soul into Theranos,” mentioned Jeffrey Coopersmith, who represents him. “He labored tirelessly, 12 months after 12 months, to make the corporate a good fortune.”
Ms. Holmes, now 38, met Mr. Balwani when she used to be 18. They started courting years later, after Ms. Holmes had based Theranos. Mr. Balwani joined Theranos in 2009, turned into its leader working officer, and ultimately invested $4.6 million within the corporate and took price of its lab. The pair stored their dating a secret and lived in combination in an expansive house they co-owned in Atherton, Calif.
In 2016, after Theranos got here beneath hearth for mendacity about its blood trying out talents, Mr. Balwani left the corporate and break up with Ms. Holmes. The pair have been charged with fraud in combination, however Ms. Holmes argued in filings to sever the circumstances and accused Mr. Balwani of emotional and sexual abuse. Her trial incorporated dramatic testimony recounting the accusations. That matter used to be excluded from Mr. Balwani’s trial.
To convict Mr. Balwani, prosecutors will have to persuade the jurors that he deliberately lied to traders and sufferers about Theranos’s blood assessments and industry dealings.
Prosecutors attempted hanging the blame on Mr. Balwani for monetary projections that Theranos confirmed to traders and the situation of its labs. New witnesses incorporated traders and bosses who dealt immediately with Mr. Balwani, fairly than Ms. Holmes.
One projection, offered to traders in October 2014, confirmed Theranos would usher in $140 million that 12 months. If truth be told, income used to be $150,000. The following 12 months, Mr. Balwani projected just about $1 billion in income in pitches to traders. Theranos’s interior projections have been a lot decrease, proof confirmed, and the truth used to be $429,210.
Mr. Schenk mentioned Theranos’s leaders had directed its scientists to validate blood assessments and start providing assessments to the general public simplest when it wanted cash from traders or shoppers. “No longer when the science used to be able,” he mentioned.
A brand new witness, Patrick Mendenhall, who dealt immediately with Mr. Balwani whilst investing in Theranos, defined the guarantees that became out to be deceptive or false.
Brian Grossman, an investor on the hedge fund PFM Well being Sciences, who used to be additionally a witness in Ms. Holmes’s trial, testified that Mr. Balwani had equipped his workforce with monetary projections that some distance overstated Theranos’s projected income.
“When Mr. Balwani communicates with an investor, it’s for a objective, and the aim is to mislead them to get cash,” Mr. Schenk mentioned.
Prosecutors additionally emphasised Mr. Balwani’s position in working Theranos’s lab, which the manager referred to as a “crisis zone” in a 2014 textual content message. Mr. Balwani would additionally “take away dissent” through intimidating or pushing out workers who expressed worry about Theranos assessments, like Dr. Adam Rosendorff, a former lab director who testified in each trials, Mr. Schenk mentioned.
Mr. Coopersmith, the protection attorney, mentioned that the federal government had painted a “extremely deceptive” image of Mr. Balwani’s time at Theranos and that it used to be unfair to turn out-of-context non-public texts as proof of a conspiracy.
The messages didn’t display Mr. Balwani telling somebody to devote fraud, Mr. Coopersmith mentioned. “If there used to be a conspiracy, you’d assume there could be a wide variety of conspiratorial, sinister conversations, and there simply isn’t,” he mentioned.
Particularly absent from the witness stand have been James Mattis, a former protection secretary and Theranos board member, and Ms. Holmes, who had each testified in Ms. Holmes’s trial. Mr. Balwani didn’t testify in his protection.
If he’s convicted, Mr. Balwani and Ms. Holmes might be sentenced in combination in September.
Erin Woo contributed reporting.
