Former Theranos executive Sunny Balwani loses bid to stay out of jail during appeals
A federal judge has rejected former Theranos executive Ramesh ‘Sunny’ Balwani’s offer to stay free as he appeals his conviction for crimes he committed during a blood test scam he he orchestrated with his former boss and lover, Elizabeth Holmes.
Thursday night’s 17-page ruling brings Balwani, 57, one step closer to a nearly 13-year prison sentence he received after a jury found him guilty of 12 counts of charge of fraud and conspiracy last year.
Balwani is due in jail on March 15 unless he can get a stay from a federal appeals court on a motion his lawyers say he intends to file.
Unless the appeals court decides he can remain free, Balwani has been ordered to report to a federal prison in Atlanta, according to court documents. The 121-year-old prison has been plagued with misconduct and other abuses described by whistleblowers during a congressional hearing last year.
US District Judge Edward Davila, who sentenced Balwani and denied his request to remain free on appeal, had recommended that he serve his sentence in a Lompoc prison. This facility is located about 250 miles from the courtroom in San Jose, Calif., where his trial was held last year.
The judge’s denial of Balwani’s request to stand free on appeal may not bode well for Holmes, CEO and founder of Theranos. His lawyers are also pushing Davila to allow him to stay out of jail during an appeal of his conviction on four counts of investor fraud and conspiracy. A hearing is scheduled for March 17 for Holmes’ lawyers to try to persuade Davila to allow him to remain free until the appeal case is resolved.
Holmes, 39, is due to start a sentence of more than 11 years on April 27. This will separate her from a one-year-old son she had shortly before her trial began in September 2021 and a newly born child she was carrying to her sentencing in November.
Although they had separate trials, Holmes and Balwani were charged with essentially the same crimes centering on a ruse touting Theranos’ blood-testing system as a revolutionary breakthrough in healthcare. The claims helped the company become a Silicon Valley sensation that raised nearly $1 billion from investors.
But its technology never came as close to working as Holmes and Balwani boasted, leading to the scandalous collapse of Theranos and a criminal case that exposed Silicon Valley greed and hubris.
Davila has yet to decide how much money Holmes and Balwani should each pay for their crimes. Federal prosecutors are seeking restitution of nearly $900 million.
During a hearing last month into Balwani’s bid to stay free, his attorneys alleged that federal prosecutors twisted and twisted trial evidence in ways that make it likely Balwani will prevail in his appeal of the convictions. . The lawyers also pointed to Balwani’s non-violent history and past charity work in India as justification for him to remain free, saying he poses no danger to the community.
Although Davila agreed that Balwani was neither a flight risk nor dangerous, he concluded that this was still not enough to allow him to delay his incarceration. Davila wrote that he found no evidence raising “a substantial question of law or fact” during Balwani’s four-month trial that would merit overturning the jury’s verdict.