In January, Elizabeth Holmes made history by becoming the first Silicon Valley entrepreneur to be found guilty of fraud related to her tenure as the CEO of the failing blood-testing company Theranos. Ramesh "Sunny" Balwani, her ex-boyfriend and former second-in-command, was also found guilty of fraud on Thursday by a different jury.
Their consecutive trials, which lasted over a year, marked the end of a startup that gained notoriety and a $9 billion valuation on the promise of revolutionising blood testing but instead turned into a cautionary story for digital entrepreneurs and businesses.
The focus now shifts to their upcoming sentencing hearings, with Holmes' scheduled for late September and Balwani's for mid-November, which will occur weeks apart from one another.
The former couple were initially charged jointly with the same 12 criminal offences four years ago, alleging that they had misled patients and investors about Theranos' capabilities and business practises in order to obtain money.
Their cases were dropped when Holmes made it clear she wanted to charge Balwani with assaulting her physically, emotionally, and mentally throughout the course of their ten-year relationship, which coincided with her time as the company's CEO. Through his counsel, Balwani has vehemently refuted the accusations.
Holmes' emotional testimony about the alleged abuse was mostly disregarded by the jury since it was deemed irrelevant to the counts she was facing, although the matter may be taken into consideration in
Holmes and Balwani each face a maximum sentence of 20 years in prison, a $250,000 fine, and restitution on each offence. However, legal professionals assert that receiving the full amount is extremely uncommon. It's also possible that any prison time imposed as a result of the charges will be served consecutively.
No one ever receives the maximum punishment allowed under the charge, according to Nancy Gertner, a retired US federal judge and senior lecturer at Harvard Law School. She added that some judges choose to give restitution a higher priority than jail time. "That doesn't happen as frequently now because it can seem like someone is buying their way out of jail, but it still happens occasionally,"
Holmes and Balwani's destinies will finally be decided by Judge Edward Davila, who presided over both of their trials, using sentence standards as a guide. Judge Davila will take into account a number of things, including the sum of money that was intended to be scammed. For instance, the total amount of the wire fraud accusations against individual investors was over $154 million.
The probation agency investigates each of the former executives between their convictions and their scheduled sentencing dates to provide a comprehensive look at their past, from their families to their finances, as well as their crimes, which will help the judge determine a sentence. The nature of Holmes' connection with Balwani, who is about 20 years her elder, and other factors, such as their psychological histories or any trauma, may also play a part in this. Additionally, Holmes and Balwani will be allowed to each submit a sentencing memo in which they will argue to the judge why they should receive a light sentence.
White collar defence expert Rachel Maimin, a partner at Lowenstein Sandler LLP, told CNN Business that "the offence itself is simply one aspect in the sentencing." "It's a crucial consideration, but it's not the only one. Each of them will be evaluated based on their own deeds and past experiences."
Both Holmes and Balwani were ultimately convicted guilty by separate juries, but they reached opposite conclusions.
Holmes, who left Stanford at the age of 19 to work at Theranos in 2004, was convicted on four counts of misleading investors. She was cleared of charges relating to patients, though, and the jury was split on three counts of misleading certain investors. (One patient-related charge was withdrawn as a result of an error by the prosecution.)
Balwani was found guilty on all 12 charges, which included 10 counts of federal wire fraud and two counts of conspiracy to commit wire fraud. Balwani assumed a formal position at Theranos in 2009 and controlled important components of the company, including its lab that processed patient testing.
Holmes has a $500,000 property-secured bail, and Balwani has a $750,000 bond, both of which are currently free on bonds.
Later this month, a hearing will be held on Holmes' motion for acquittal.
Attorney Jeffrey Coopersmith of Orrick, Herrington & Sutcliffe, who represents Balwani, said in a statement on Thursday that the defence is looking into potential legal strategies to challenge the verdict.
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