'Theranos Founder, Described as Silicon Valley's Biggest Fraud, Ex-Partner Also Found Guilty'

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Seulgina Jo] Ramesh (Sunny) Balwani, Chief Operating Officer (COO) and former partner of Elizabeth Holmes, the founder of the American biotechnology company Theranos who fell from being the 'female Steve Jobs' to a 'notorious fraudster,' was found guilty on the 7th (local time).

According to local media such as CNBC, the jury at the San Jose District Court in California found Balwani guilty on all 12 charges against him. Based on the jury's verdict, the sentencing date and penalty will be finalized later.

Balwani was charged with raising hundreds of millions of dollars and inducing transfers by deceiving investors and patients with false information alongside Holmes. CNBC reported that he faces up to 20 years in prison for 10 counts of wire fraud and up to 5 years for 2 counts of conspiracy to commit fraud. However, legal experts expect Balwani to appeal.

Earlier, Holmes, the founder of Theranos, was found guilty on 4 of 11 charges in her trial in January this year. Theranos attracted over $900 million from investors including media mogul Rupert Murdoch by promoting technology that could diagnose more than 250 diseases from a single drop of blood, and its corporate value soared to $9 billion in 2015.

However, after a whistleblower revealed that Theranos' blood disease diagnostic technology was "close to a scam," and investigative reports by The Wall Street Journal (WSJ) followed, the fraud was eventually exposed. Theranos' corporate value then plummeted to zero, leading to liquidation proceedings.

Balwani joined Theranos in 2009 and became COO within a few months. It is reported that Balwani and Holmes' romantic relationship ended after Theranos' downfall. During this process, Holmes, who claims innocence, alleged that she was psychologically, emotionally, and sexually abused by Balwani, leading to a mudslinging battle.

Balwani's trial began in March this year. Unlike Holmes, who drew long lines from early morning to secure tickets to enter the courtroom, Balwani's trial received little public attention. Prosecutors have claimed that Balwani played a supervisory role in the project where Theranos partnered with the major U.S. pharmacy chain Walgreens.