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The Guardian - US
The Guardian - US
Technology
Guardian staff and agencies

Elizabeth Holmes looms large on first day of Sunny Balwani’s Theranos trial

Sunny Balwani, center, arrives at the court with his legal team on 16 March in San Jose, California.
Sunny Balwani, center, arrives at the court with his legal team on 16 March in San Jose, California. Photograph: Justin Sullivan/Getty Images

The specter of Elizabeth Holmes loomed over the opening day of a trial that will determine whether Ramesh “Sunny” Balwani, her former romantic and business partner at Theranos, was also her partner in crime.

Tuesday marked the opening of a case slated to begin last week, which was delayed by a Covid-19 exposure.

In opening statements, a federal prosecutor depicted Balwani as an instrumental accomplice who helped Holmes pull off a huge scam tied to Theranos’ blood-testing technology.

Balwani’s lawyer countered by casting Balwani as a savvy and well-meaning executive who poured millions of his own dollars into Theranos because he so fervently believed the Silicon Valley company would revolutionize healthcare.

Balwani’s trial began two and a half months after another jury found Holmes guilty on four counts of investor fraud while acquitting her on four other charges accusing her of duping patients about the effectiveness of Theranos’ blood tests.

Although Balwani is getting a separate trial on similar criminal charges, it quickly became clear Holmes, though not in the courtroom, would be a prominent figure in the trial.


Holmes’ name came up repeatedly during the federal prosecutor Robert Leach’s roughly 50-minute opening statement to the jury, as did her picture on screens placed around the courtroom, including displays in front of Balwani.

“You will see how they were partners in everything, including their crimes,” Leach said of the alliance between Holmes, 38, and Balwani, 57.

Balwani’s lawyer, Stephen Cazares, also made multiple references to Holmes during his 90-minute presentation, but mostly in ways meant to cast Balwani as an already successful entrepreneur who had left the company in better shape than when he joined it while providing a desperately needed infusion of cash.

Although Balwani became romantically involved with Holmes around the same time she founded Theranos after dropping out of Stanford University in 2003, Cazares emphasized Balwani didn’t begin working at the company until 2009. At that point, Cazares said, Balwani put up $10m of his own money to guarantee a loan for Theranos before investing another $5m to buy a stake in the company. That stake eventually became worth $500m on paper.

“Sunny believed in Theranos, its technology and its mission,” said Cazares, a former federal prosecutor.

In 2010, Balwani became Theranos’s chief operating officer, a job he held until 2016 when he left the company amid revelations about serious flaws in a technology that Theranos had boasted could to scan for hundreds of potential health problems with just few drops of blood. Those audacious and ultimately bogus claims helped Theranos raise nearly $1bn and strike lucrative deals with Walgreens and Safeway before it all unraveled and the company collapsed.

While Cazares told the jury Balwani had gotten the job at Theranos the because of his past successes, Leach sought to portray him as unqualified to be overseeing a company attempting to develop a medical device.

“What he did have is a connection to Elizabeth Holmes,” Leach said of Balwani.
The close relationship between Holmes and Balwani came up frequently during Holmes’ trial too, including text messages between the two former lovers. Leach indicated some of those same texts would be submitted as evidence during Balwani’s trial. He also telegraphed that many of the same witnesses called to testify against Holmes were likely to resurface in these proceedings.

Holmes’ trial included a dramatic afternoon when she tearfully accused Balwani of being a sometimes domineering figure in her life who subjected her to emotional and sexual abuse. One of Balwani’s other attorneys vehemently denied those allegations during Holmes’ trial and Cazares urged jury members in the current trial to discard anything they may have recalled reading or hearing about them.

“The headlines and sensational stories about Elizabeth Holmes have no place in this trial,” Cazares said.

Holmes faces up to 20 years in prison but is free on $500,000 bail while awaiting her sentencing, scheduled for September. That has raised speculation that Holmes might agree to testify against Balwani in exchange for a recommendation of leniency, although that is considered a remote possibility.

Without an appearance by Holmes, Balwani’s trial seems unlikely to attract the intense attention of her trial, which lasted from last September to her January conviction. That was evident early on Tuesday, with only a few people lined up to get into the courthouse about an hour before it opened. That was in stark contrast to Holmes’ trial, which attracted long lines of people in the early morning hoping to get into the courtroom.

Balwani’s trial is expected to run for the next three months.


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