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End of a chapter at Theranos: What’s next for former top two executives

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Their back-to-back trials spanned almost a 12 months and mark the ultimate chapter of a startup that rose to prominence, and a $9 billion valuation, with a promise to revolutionize blood testing solely to grow to be a cautionary story for tech founders and corporations.

Now, the anticipation turns to their sentencing hearings, that are slated to happen weeks other than each other, with Holmes’ scheduled for late September and Balwani’s for mid-November.

The previous couple had been first indicted together 4 years in the past on the identical 12 felony fees pertaining to defrauding traders and sufferers about Theranos’ capabilities and enterprise dealings with a purpose to get cash.
Their trials had been severed after Holmes indicated she supposed to accuse Balwani of sexually, emotionally and psychologically abusing her all through their decade-long relationship, which coincided together with her time working the corporate. Balwani, by his attorneys, has strongly denied the allegations.
The jury largely set apart Holmes’ emotional testimony concerning the alleged abuse, discovering it irrelevant to the fees she confronted, however the situation could also be thought of in her sentencing willpower.

Sentencing

Holmes and Balwani every resist 20 years in jail in addition to a wonderful of $250,000 plus restitution per depend. However authorized specialists say it’s extremely uncommon that somebody will get the complete quantity. Any jail time related to fees can be more likely to be served concurrently.

“The cost defines probably the most the particular person may get, however no one ever will get probably the most,” mentioned Nancy Gertner, a former US federal decide and senior lecturer at Harvard Regulation College. She additionally famous that generally judges decide to extra closely weigh restitution over jail time. “That does not occur as usually lately as a result of it could actually seem like somebody is shopping for their method out of jail -— however it could actually occur.”

Elizabeth Holmes walks outside of federal court after she was found guilty on 4 of 11 accounts faced in her fraud trial in San Jose, California, January 3, 2022.

Decide Edward Davila, who presided over each Holmes’ and Balwani’s trial, will in the end resolve their fates as he sees match, utilizing sentencing pointers as a reference. Decide Davila will contemplate a wide range of elements, together with the amount of cash supposed to be defrauded. The wire fraud fees associated to particular person traders totaled greater than $154 million, for instance.

The rise and fall of Theranos: A timeline

Between their convictions and their scheduled sentencing dates, the probation workplace conducts an investigation into every of the previous executives to supply a holistic take a look at their historical past — from their household to their financials, in addition to their crimes — which is able to help the decide in figuring out a sentence. Which will additionally embody elements resembling their psychological histories, or any trauma, which is the place Holmes’ allegations concerning the nature of her relationship with Balwani, who is sort of 20 years her senior, could play a job. Holmes and Balwani may even every be permitted to submit sentencing memoranda that make their case to the court docket for leniency in sentencing.

“The crime itself is just one issue within the sentencing,” Rachel Maimin, a associate at Lowenstein Sandler LLP who makes a speciality of white collar protection, instructed CNN Enterprise. “It is a vital issue, however positively not the one issue. … They’ll every be judged by their very own actions and personal life historical past.”

Free on bond

What it was like to be in the courtroom for Elizabeth Holmes' fraud trial

Separate juries in the end discovered each Holmes and Balwani to be responsible, however they returned completely different verdicts.

Holmes, who dropped out of Stanford in 2004 at age 19 to work on Theranos, was discovered responsible on 4 fees pertaining to defrauding traders. However she was acquitted on patient-related fees, and jurors could not come to a unanimous determination on three fees regarding defrauding particular traders. (One cost pertaining to a affected person was dropped attributable to an error by the prosecution.)
Former Theranos COO Ramesh "Sunny" Balwani and his legal team leave the Robert F. Peckham Federal Building on July 7, 2022 in San Jose, California.

Balwani, who took on a proper position at Theranos in 2009 and oversaw key facets of the corporate together with its lab that processed affected person checks, was discovered responsible on all 12 fees, which included 10 counts of federal wire fraud and two counts of conspiracy to commit wire fraud.

Each are at the moment free on bonds — Holmes on a $500,000 bond secured by property and Balwani on a $750,000 bond secured by money or property.

A listening to on Holmes’ movement for an acquittal is slated for later this month.

In the meantime, Balwani lawyer Jeffrey Coopersmith of Orrick, Herrington & Sutcliffe mentioned in a press release Thursday that the protection is exploring avenues to probably battle the decision.

“We’re clearly dissatisfied with the verdicts,” he mentioned. “We plan to check and contemplate all of Mr. Balwani’s choices together with an enchantment.”