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Fraud trial in opposition to Elizabeth Holmes’ associate at Theranos nears finish – EAST AUTO NEWS

Fraud trial in opposition to Elizabeth Holmes’ associate at Theranos nears finish


SAN JOSE, Calif. — In a harshly worded closing argument, prosecutors on Tuesday mentioned former Theranos COO Ramesh “Sunny” Balwani “wasn’t a sufferer, he was the perpetrator of fraud” within the firm’s downfall, whereas his lawyer blasted the federal government’s case calling it inconsistent.

The closing statements capped a three-month-long trial the place the federal government alleged Balwani acted along with his ex-girlfriend and enterprise associate, Theranos founder Elizabeth Holmes, in a multi-million-dollar scheme to defraud buyers and sufferers.

“Mr. Balwani had a option to make,” Assistant U.S. Legal professional Jeffrey Schenk mentioned. “He might watch Theranos fail, he might watch his girlfriend’s enterprise collapse, or he might pursue it in a different way. Mr. Balwani on the time knew that Theranos was not producing cash and wouldn’t generate any income by being trustworthy with folks.”

In his four-hour closing argument, Schenk relentlessly attacked Balwani’s credibility at Theranos and linked him to a number of components of the enterprise.

“Collectively, with Elizabeth Holmes, they got here up with two schemes,” Schenk mentioned. “Two plans to defraud these teams of people. They determined to defraud buyers in Theranos and so they determined to defraud sufferers. And it is due to these selections that Mr. Balwani made that we have been collectively since March.”

Balwani, 56, faces ten counts of wire fraud and two counts of conspiracy to commit wire fraud. He, identical to Holmes, has pleaded not responsible. Balwani joined Theranos in 2009 when the corporate was struggling financially. He stepped in by offering a $13 million mortgage.

Six months later, Balwani turned chief working officer and president of Theranos and finally took over lab operations. Holmes and Balwani went to nice lengths to maintain their romance a secret from workers, buyers and enterprise companions.

At one level, Balwani’s stake was value $500 million, in response to his legal professionals, and the software program govt by no means bought a share. His private {and professional} relationship with Holmes resulted in 2016 simply as Theranos started to unravel.

Throughout closing arguments, Schenk ran the jury by means of all 24 authorities witnesses, summarizing their testimony whereas displaying their image on the courtroom monitor.

The federal government’s case in opposition to Balwani was vastly much like the case pursued in opposition to Holmes, who was convicted in January of 4 counts of fraud and conspiracy to commit wire fraud in opposition to buyers. Whereas Holmes awaits sentencing in September, her attorneys have filed a movement asking the choose to overturn the decision and acquit her.

In contrast to Holmes, Balwani didn’t testify in his personal protection. Attorneys for Balwani placed on a a lot shorter case, calling two witnesses: an Arizona doctor who used Theranos blood analyzers and an data technical marketing consultant who testified a couple of lacking database that contained affected person take a look at outcomes.

Schenk reminded jurors that Balwani advised buyers Theranos would generate $1 billion in income by 2015 because of a cope with Walgreens.

“He is aware of he duped Walgreens into the enterprise relationship,” Schenk mentioned. “And it is only a matter of time earlier than that home of playing cards crumbled.”

The pharmacy chain was a key associate for Theranos, rolling out wellness facilities inside 40 of its Arizona shops. “Having the connection to Walgreens was helpful to recruiting buyers,” Schenk mentioned. Walgreens terminated its partnership with the start-up in 2016.

Prosecutors preserve Balwani was answerable for the lofty monetary projections that buyers relied on. Schenk mentioned when buyers questioned Theranos’ claims, Balwani would typically reassure them that the know-how labored.

“As a result of what’s deadly to fraud?” Schenk requested the jury. “The reality.”

The protection, which started its closing argument late Tuesday afternoon tried to poke holes. “The federal government determined to not present you the entire story as a result of it was inconsistent with the narrative they wished to inform,” Jeffrey Coopersmith, an lawyer for Balwani, mentioned.

Coopersmith ticked by means of the all-star group of highly effective board members and buyers that Holmes attracted.

“She was sensible and charismatic – she needed to be,” Coopersmith mentioned. “Mr. Balwani would have seen the identical factor in Elizabeth Holmes that these folks noticed. And also you marvel why he was interested in Theranos, why he was interested in Ms. Holmes.”

Coopersmith advised the jury that Balwani “put his coronary heart and soul into Theranos, he labored tirelessly 12 months after 12 months to make the corporate successful,” later including “the federal government hasn’t proved Mr. Balwani tried to deceive or cheat anyone.”

Federal prosecutors will get the ultimate phrase of their rebuttal. The jury is anticipated to start deliberations as quickly as this week.  

“Mr. Balwani desires you to assume he is a sufferer,” Schenk mentioned. “That he had choices and by no means exercised them, so he left cash on the desk. He additionally desires you to assume he wasn’t excessive sufficient within the org chart to have significant conversations with buyers and sufferers. However you already know that is not the reality.”

Fraud trial in opposition to Elizabeth Holmes’ associate at Theranos nears finish – EAST AUTO NEWS
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