In the USA, a court in the state of California sentenced the former president and chief operating officer of Theranos Ramesh Balwani to 13 years in prison. He was found guilty of fraud and conspiracy to defraud investors.
This is reported by the BBC.
He will also have to pay compensation (how much is not yet known). Unlike startup founder Elizabeth Holmes, who was found guilty of defrauding investors, Balwani was also found guilty of defrauding patients. Both Holmes and Balwani will appeal.
Ramesh Balwani in court on Wednesday, December 7, 2022.
Getty Images / «Babel'»
On November 18, 2022, Theranos founder Elizabeth Holmes was sentenced to 11 years in prison. Balwani was her deputy and directly managed the companyʼs laboratories. Although initially charged together, the trials were split after Holmes accused Balwani of emotional and physical abuse during their romantic relationship while working at Theranos.
Elizabeth Holmes and Theranos
In 2004, Elizabeth Holmes wrote a patent for a miniature "armband": it simultaneously diagnosed the patientʼs blood and administered the necessary drug. After that, Holmes raised the first venture capital of $6 million, using family connections and acquaintances, and founded a startup. When it became clear that the "armband" could not be implemented technologically, Holmes made a "pivot" — a common move for a technology startup, changing the concept of the product: now she planned to release a stationary portable blood analyzer. Even in this form, her product could revolutionize the market. Holmes sincerely believed in her mission to "change the world" — which is why, even when the new concept faced insurmountable technological obstacles, she managed to effectively lie to investors, employees and the press.
In 10 years, she built the "Potiomkin" company Theranos, which was valued at $9 billion, on her personal charisma and willingness to lie to investors. Her deception was exposed by The Wall Street Journal reporter John Carreiro — it turned out that the technology claimed by Holmes does not work, Theranos secretly conducts blood tests on the equipment of other companies, and their results are distorted. In 2018, Theranos was liquidated, and in March 2019, the NVO channel released a documentary about Elizabeth Holmes, "The Inventor: Bloodthirst in Silicon Valley."