Ramesh Balvan’s lawyers spent months trying to distinguish him from Elizabeth Holmes, his ex-girlfriend and business partner at the failed blood testing company Theranos.
Ms Holmes pleaded guilty to fraudulent start-up investors in January. Mr Balvani is seeking a different outcome in his own fraud court.
But on Tuesday, in the final testimony of Mr Balvania’s trial, prosecutors charged him directly with Ms. Holmes and multiple years of fraud in Teranos. Jeffrey Shank, U.S. Assistant Attorney General and Attorney General in the case, showed a text message sent by Mr. Balvani to Ms. Holmes in 2015 that was used as evidence in the trial.
“I am responsible for everything at Teranos,” Mr Balvani wrote. “Everything is also up to me.”
The text message was an admission of guilt, Mr Shenk said, adding that he “acknowledges his role in the fraud”.
The presentation included more than three months of testimony at Mr. Balvan’s trial, largely reflecting on Ms. Holmes last fall. Ms. Holmes and Mr. Balvani, 57, were charged in 2018 with Theranos’s blood testing equipment capabilities and exaggerated business performance when, in fact, the products were not working and their business was struggling. The duo pleaded not guilty. Ms Holmes was tried on four of the 11 charges.
Mr. Balvan’s trial, known as Sunny, lacked Ms. Holmes’s high-profile case. Nevertheless, it serves as an early growth era for the code, which often relied on agitation and hyperbole. Ms. Holmes and Mr. Balvan are among the few technical executives who have ever been convicted of fraud.
Just as Mrs. Holmes tried to accuse others of cheating on Teranos, Mr. Balvani pointed his finger back at him. Throughout the trial, his lawyers argued that many of Teranos’s blood tests worked. And they said that Mrs. Holmes was in control of Terranos and not Mr. Balvan. They should start their final argument on Tuesday.
Mrs. Holmes, now 38, met Mr. Balvan when he was 18 years old. Their relationship began years later, after Mrs. Holmes founded Theranos. In 2009, Mr. Balvan invested in Theranos and became its Chief Operating Officer, eventually leading his laboratory. The couple kept the relationship a secret and lived together in a large house in Atherton, California.
In 2016, after Teranos was criticized for lying about his blood testing capabilities, Mr. Balvani left the company and divorced Ms. Holmes. The couple were charged together with fraud, but Ms Holmes was arguing over the termination of the case and Mr Mr Balvani was accused of emotional and sexual violence. His trial involved dramatic testimony in the prosecution’s narrative. This subject was excluded from Mr Balvan’s trial.
To prosecute Mr. Balvania, prosecutors must convince jurors that he deliberately deceived investors and patients about Teranos’s blood tests and business deals.
Prosecutors sought to blame Mr. Balvani for the financial projections that Theranos showed to investors and the condition of his laboratories. The new witnesses included investors and executives who were directly related to Mr. Balvan and not to Ms. Holmes.
One projection, presented to investors in October 2014, showed that Theranos would bring in $ 140 million that year. Actually income was limited. Next year, Mr. Balvan plans to invest $ 1 billion in revenue. Evidence showed that Teranos’s internal predictions were much lower and the reality was close to zero.
The new witness, Patrick Mendenhall, who was in direct contact with Mr. Balvan while investing in Teranos, revealed promises that turned out to be false or misleading.
Brian Grossman, an hedge fund investor at PFM Health Sciences who also witnessed Ms. Holmes’s trial, testified that Mr. Balvani provided his team with financial projections that significantly exceeded Theranos’s estimated revenue.
“When Mr. Balvani contacts an investor, it is purposeful and the purpose is to deceive them to get the money,” Mr Shenk said.
Prosecutors also highlighted Mr. Balvan’s role in running Theranos Laboratory, which the executive used as evidence in the 2014 disaster “disaster zone.” Mr Balvani will also “get rid of the controversy” by intimidating or firing staff members who have expressed concern about Theranos tests, such as Dr. Adam Rosendorf, a former lab director who testified in both trials, Mr Shenk said.
Not particularly present at the Witness hearing were James Metis, a former Secretary of Defense and board member of Theranos, and Ms. Holmes, who both testified at Ms. Holmes’s trial. Mr Balvan did not testify in his defense.
If convicted, Mr Balvani and Ms Holmes will be tried together in September.