Jury deliberations stretched for four full days following a lengthy trial that got underway in March with opening statements. Balwani, the former president and COO at Theranos, was indicted alongside Holmes four years ago for allegedly defrauding investors and patients. Their trials were severed after Holmes’ legal team outlined in legal filings that she planned to make accusations about their relationship as part of her defense.
Balwani’s verdict comes roughly six months after Holmes, the founder and former CEO of the failed blood testing startup, was found guilty on four of 11 federal fraud and conspiracy charges.
Holmes founded Theranos when she was 19 years old in an effort to create a cheaper, more efficient alternative to traditional blood testing, a goal she said was inspired by her own fear of needles. The startup later claimed to have developed technology capable of testing for a range of conditions, including cancer and diabetes, using just a few drops of blood. Theranos ultimately raised $945 million from investors, including well-known figures such as media mogul Rupert Murdoch and Walmart’s Walton family. It also struck up partnerships with prominent retailers.
Then it all came crashing down, beginning with a 2015 Wall Street Journal investigation into the startup that revealed holes in its testing methods and technological capabilities.
Balwani’s trial took place in the same San Jose, California, courtroom where Holmes was convicted. His case was pushed back several times due to delays in Holmes’ trial and later by a surge in Covid-19.
To make its case against Balwani, the government called two dozen witnesses — many of whom were previously called to testify in Holmes’ trial — as it sought to convince jurors that he had intentionally lied and deceived investors and patients in order to take their money. The defense called only two witnesses to testify. During its arguments, the defense portrayed Balwani as having acted in good faith and having believed in the company’s technology. The defense also attempted to cast doubt on whether the government had enough evidence for the jury to find Balwani guilty.
Balwani’s relationship with Holmes dates back to 2002, when the two met while attending a summer program in Beijing to learn Mandarin. Balwani, nearly 20 years older than Holmes, had already had a successful career in the software industry and as an entrepreneur. As Holmes testified in her own defense in her trial, a friendship forged between the two ultimately turned romantic.
By 2005, the year after Holmes dropped out of Stanford to work full-time on Theranos, the pair were living together. In 2009, Balwani took a formal role at the startup, after guaranteeing it a $10 million loan.
Balwani faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count of wire fraud and each conspiracy count. He has pleaded not guilty.
Holmes is slated to be sentenced in late September.
