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Ex-Theranos President Balwani has been sentenced to almost 13 years in prison for fraud

Ex-Theranos President Balwani has been sentenced to almost 13 years in prison for fraud
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DECEMBER 7 (Reuters) – A US judge on Wednesday sentenced former Theranos Inc president Ramesh “Sunny” Balwani to 12 years and 11 months in prison on charges of defrauding investors and patients in the blood-testing startup which will be headed by Elizabeth Holmes, a spokeswoman for the company, has been confirmed by US Attorneys.

U.S. District Judge Edward Davila in San Jose, California, returned the sentence to Balwani, which it was sentenced by a jury on two counts of conspiracy and 10 counts of fraud in July.

Prosecutors said Balwani, 57, conspired with Holmes, 38, to fool Silicon Valley investors that the company had developed miniaturized devices that could accurately perform a wide range of medical diagnostic tests using a small amount of blood.

Meanwhile, the company secretly relied on traditional methods to conduct tests and provided inaccurate results to patients, prosecutors said.

Holmes, who founded the company as a college student and became its public face, was indicted in 2018 along with Balwani, her former romantic partner.

Davila later granted each a separate trial after Holmes said she would take a stand and testify that Balwani was abusive in their relationship. He has denied the allegations.

Holmes was convicted of four counts of fraud and conspiracy in January but acquitted of fraud on patients.

davila sentenced Holmes was sentenced to 11 1/4 years in prison at a hearing last month, calling Theranos a company “shattered by untruths, misrepresentations, outright hubris and lies.”

prosecutors in the episode argued Balwani was set to receive 15 years in prison because he knew that Theranos’ tests were inaccurate because he oversaw the company’s lab operations, and decided to “put Theranos’ financial health ahead of the real health of the patients.”

The parole board recommended a nine-year sentence.

Balwani’s lawyers called for a suspended sentence, arguing that he wanted to make the world a better place through Theranos and was not motivated by fame or greed.

Once valued at $9 billion, Theranos promised to revolutionize the way patients receive diagnostics by replacing traditional labs with small machines intended for use in homes, drugstores, and even on the battlefield.

The company collapsed after a series of articles in The Wall Street Journal in 2015 questioned its technology.

The case is US v. Balwani, US District Court, Northern District of California, No. 18-cr-00258.

Reporting by Jody Godoy in New York; Edited by Noeleen Walder and Bill Berkrot

Our standards: The Thomson Reuters Trust Policy.

Jody Godoy

Thomson Reuters

Jody Godoy reports on banking and securities law. Reach her at jody.godoy@thomsonreuters.com

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