New York, Mar 10: Ramesh “Sunny” Balwani, the Indian-origin former chief operating officer of a US-based failed blood-testing start-up, Theranos, has lost his bid to remain free while he appeals his conviction on fraud charges that prosecutors said risked patient health and defrauded the firm’s investors of millions of dollars, according to a media report.
A federal judge on Thursday, in a 17-page ruling, denied the motion by Balwani to remain free until his appeal to a higher court is resolved, the CBS News channel reported.
US District Judge Edward Davila held a nearly two-hour hearing on Balwani’s motion in mid-February but delayed ruling until six days before the convict must report to prison.
Balwani, 57, was sentenced in December last year in California to 12 years and 11 months in federal prison for fraud that risked patient health by misrepresenting the accuracy of Theranos blood analysis technology and that defrauded the blood-testing company’s investors of millions of dollars.
In addition to the 155-month prison term, District Judge Davila sentenced Balwani to three years of supervision following his release from jail. Balwani was ordered to surrender on March 15, 2023, to begin serving his prison sentence.
In the order issued late Thursday, District Judge Davila wrote that although Balwani “is not likely to flee or pose” a danger to the community, “the most important requirement for staying free while the 9th Circuit Court of Appeals looks at the case was not met, the report said.
The convict did not show that there was a “substantial” error in the trial that would “likely result in a reversal or new trial,” the report added.
Balwani was employed from September 2009 through July 2016 at the Palo Alto-based blood-testing company founded in 2003 by his former girlfriend, Elizabeth Holmes, who was once touted as Silicon Valley’s rising star.
Balwani and Holmes, who was the firm’s chairperson and CEO, claimed Theranos developed a “revolutionary blood analyser” that could run any blood test run by conventional labs using only a minor blood sample drawn via a fingerstick rather than the traditional draw from a vein, US Attorney Stephanie Hinds said in a statement at the time of the trial.
The duo asserted that the Theranos proprietary analyser produced results that were cheaper, more reliable and less variable than the existing methods and obtained results faster than ever possible before.
However, proof from last year’s trial demonstrated that Balwani and Holmes knew that the analyser performed only a few basic tests and was slower than existing devices. According to the statement, The duo repeatedly used conventional machines to obtain the blood test results that the Theranos analyser was supposed to perform.
They led investors and the public to believe that Theranos was conducting all its tests using only its analyser.
Trial evidence showed that the fraud brought “spectacular personal wealth” to Balwani, who owned nearly 30 million shares of Theranos – over 6 per cent of the company – worth hundreds of millions of dollars at the peak of the fraud.
Last year, Davila sentenced Holmes to 11 years and three months in federal prison and ordered her to surrender to begin serving her sentence on April 27, 2023.
Federal criminal charges were initially filed against Balwani and Holmes in June 2018. In July 2020, a federal grand jury returned a superseding indictment charging both with two counts of conspiracy to commit wire fraud and ten counts of wire fraud. In July this year, Balwani was convicted by a federal jury on all counts after a four-month trial.
Balwani was tried separately from Holmes, and in her trial, Holmes was not convicted of all counts.
Balwani was born in Pakistan, but his family is said to have moved to India. He moved to the US from India during the 1980s and studied at the University of Texas. (PTI)
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