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Ramesh Balwani

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Ramesh Balwani
BornMarch–June 1965 (age 53–54)
Other namesSunny Balwani
Alma materUniversity of Texas at Austin
University of California, Berkeley
Known forFormer president and COO of Theranos
Spouse(s)
Keiko Fujimoto
(div. 2002)
Partner(s)Elizabeth Holmes

Ramesh "Sunny" Balwani (born March–June 1965[2]) is the former president and chief operating officer of Theranos, which was a privately held health technology company founded by his then-girlfriend Elizabeth Holmes. Theranos is known for its allegedly false claims to have devised revolutionary blood tests that used very small amounts of blood.[3] Starting in 2015–2016, Theranos came under criticism in the media due to its questionable claims and practices. The company was eventually forced into bankruptcy. Balwani is facing SEC fraud charges for a multi-million-dollar scheme to defraud investors, and separate Federal criminal charges in a scheme to defraud doctors and patients. He maintains his innocence and is fighting the charges in court.[4][5]

Early life, education, and pre-Theranos career

Ramesh Balwani was born in Pakistan to a Hindu family.[1] Because of the difficulties of being a Hindu in Pakistan, the family later moved to India.[1] The family then immigrated to the United States, and in 1986 Balwani began undergraduate studies at the University of Texas at Austin where he was a member of the Pakistani Students Association.[6] He received an undergraduate degree in information systems.[6] Balwani worked for Lotus Software and Microsoft before 1998, when he helped to create of CommerceBid,[7] a software development company that helped businesses buy and sell items over the burgeoning Internet.[6] In 1999, the company was purchased by Commerce One, another business development software company with a high valuation stock - the buyout was done entirely with stock.[6] Balwani joined the board of the new company. In July 2000, Balwani cashed out his shares in Commerce One, pocketing nearly $40 million shortly before the company went out of business, just before the dot com bubble burst.[8][6] He later went back to school and received a Master of Business Administration from the University of California, Berkeley in 2003.[6] He spent another four years in a computer science graduate program at Stanford University, but dropped out in 2008.[6]

While enrolled at Berkeley, Balwani met Elizabeth Holmes, who was in her senior year of high school.[8] Holmes then went on to Stanford University to pursue an undergraduate degree in chemical engineering,[8] but later dropped out to focus full-time on Theranos.[9][10]

Theranos

Theranos Logo

Balwani joined Theranos in 2009, a few years after Holmes founded it. He ran the company's day-to-day operations as its president.[11] He had no training in biological sciences or medical devices,[11] which became an issue due to the absence of medical experts on the company's board of directors and Balwani's behavior. He was described by former Theranos employees as overbearing, uncompromising, demanding and so secretive and worried about industrial espionage that he verged on paranoia.[8]

Balwani at one point claimed: "This invention [the Edison blood testing device] is going to be way up there, um, with-- with the discovery of antibiotics."[11] Within Theranos, Balwani was known for using technical terms he seemingly did not understand in what others believed were attempts to appear more knowledgeable.[8]

The Wall Street Journal reported in October 2015 that the Edison blood testing device by Theranos produces inaccurate medical diagnoses and results.[12] Edison machines frequently failed quality-control checks and produced widely varying results and this was corroborated in inspection results released in March 2016 by the federal Centers for Medicare and Medicaid Services.[13] In April 2016, Theranos told regulators it had voided all test results from Edison machines for 2014 and 2015, as well as some other tests it ran on conventional machines.[13]

In January 2016, the Centers for Medicare and Medicaid Services (CMS) sent a warning letter to Theranos after inspecting its Newark, California, laboratory.[14] CMS regulators proposed a two-year ban on Balwani from owning or operating a blood lab after the company had not fixed problems within its California lab in March 2016.[15]

The other charges of fraud against Theranos include claiming the company's technology was being used by the U.S. Department of Defense in combat situations despite never having been used.[16]

Another false claim included claiming a $100 million revenue stream in 2014 that was actually $100,000.[17]

Legal proceedings

SEC fraud charges

In March 2018, the SEC brought securities fraud charges against Balwani and Holmes for engaging in an "elaborate, years-long fraud".[18][19] They were charged with "raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance," said the SEC.[18] Holmes settled the case out of court without admitting or denying wrongdoing, but Balwani is still in litigation as of 2019.[18] He says he is innocent of the charges.[18]

Criminal charges

On June 15, 2018, following an investigation by the U.S. Attorney's Office in San Francisco that lasted more than two years, a federal grand jury indicted president Ramesh "Sunny" Balwani and Elizabeth Holmes on nine counts of wire fraud and two counts of conspiracy to commit wire fraud.[20] Prosecutors allege that Holmes and Balwani engaged in two criminal schemes, one to defraud investors, the other to defraud doctors and patients.[20] The case is proceeding in the U.S. District Court in San Jose. Balwani and Holmes pleaded not guilty.[20] Balwani's defense is that he never made any money while at Theranos.[21]

Personal life

Balwani was in a romantic relationship with Elizabeth Holmes during his tenure at Theranos.[22][23] Holmes met him in 2002 at age 18, while still in school; he was 19 years older than her and married at the time.[22] Their relationship was not disclosed to their Theranos investors.[24]

He was previously married to a Japanese artist named Keiko Fujimoto.[8] Fujimoto and Balwani lived in San Francisco, before they divorced in December 2002.[25]

References

  1. ^ a b c Taylor Dunn (March 14, 2019). "When Theranos' remarkable blood-test claims began to unravel: 'The Dropout' episode 5". ABC News. Retrieved March 16, 2019.
  2. ^ "Indian-American ex prez, Theranos CEO charged with 'massive fraud'". Times of India. March 15, 2018. Retrieved August 12, 2018. Balwani, 52; John Carreyrou (June 15, 2018). "U.S. Files Criminal Charges Against Theranos's Elizabeth Holmes, Ramesh Balwani". WSJ. Retrieved August 12, 2018. Balwani, 53. The source in March 2018 reports him as age 52. The source in June 2018 reports him as age 53. He was born sometime between March and June 1965.
  3. ^ Levine, Matt (March 14, 2018). "The Blood Unicorn Theranos Was Just a Fairy Tale". Bloomberg L.P. Retrieved June 17, 2018.
  4. ^ Carreyrou, John (June 15, 2018). "U.S. Files Criminal Charges Against Theranos's Elizabeth Holmes, Ramesh Balwani". The Wall Street Journal. Retrieved June 17, 2018.
  5. ^ "Theranos Founder Elizabeth Holmes and Former COO Sunny Balwani Charged with Wire Fraud". June 15, 2018. Retrieved June 17, 2018.
  6. ^ a b c d e f g Rebecca Robbins (March 19, 2018). "Investigators say his fingerprints are all over financial crimes at Theranos. Why is he a virtual ghost?". Stat. Retrieved December 28, 2018 – via Yahoo! News.
  7. ^ "Commerce One Buys Commercebid for Stock and Cash". The New York Times. The New York Times Company. Bloomberg News. November 6, 1999.
  8. ^ a b c d e f John Carreyrou (21 May 2018). Bad Blood: Secrets and Lies in a Silicon Valley Startup. Knopf Doubleday Publishing Group. ISBN 978-1-5247-3166-3. Note: the British edition of Bad Blood incorrectly gives Balwani's country of origin as India.
  9. ^ Kim, Larry (July 1, 2015). "21 Surprising Facts About Billionaire Entrepreneur Elizabeth Holmes". inc. Retrieved June 17, 2018.
  10. ^ "Sunny Balwani". TechCrunch. Retrieved June 17, 2018.
  11. ^ a b c "The Theranos deception". CBS News. May 20, 2018. Retrieved June 17, 2018.
  12. ^ Carreyrou, John (October 16, 2015). "Hot Startup Theranos Has Struggled With Its Blood-Test Technology". Wall Street Journal. Retrieved June 17, 2018.
  13. ^ a b Carreyrou, John (November 18, 2016). "Theranos Whistleblower Shook the Company—and His Family". Wall Street Journal. Retrieved June 17, 2018.
  14. ^ Arielle Duhaime-Ross (February 1, 2016). "Here's what Theranos customers need to know". The Verge. Retrieved June 17, 2018.
  15. ^ Abelson, Reed; Pollack, Andrew (April 13, 2016). "Theranos Under Fire as U.S. Threatens Crippling Sanctions". The New York Times. The New York Times Company. Retrieved June 17, 2018.
  16. ^ della Cava, Marco (March 14, 2018). "She was 'the next Steve Jobs.' Now, Theranos founder Elizabeth Holmes is charged with fraud". USA Today. Retrieved June 17, 2018.
  17. ^ Robinson, Matt; Spalding, Rebecca (March 14, 2018). "Blood, Fraud and Money Led to Theranos CEO's Fall From Grace". Retrieved June 17, 2018.
  18. ^ a b c d Alexia Fernandez (March 27, 2019). "Who Is Sunny Balwani? All About Elizabeth Holmes's Ex-Boyfriend and Former Theranos President". People. Retrieved April 3, 2019 – via Yahoo! News.
  19. ^ Carolyn Y. Johnson (March 14, 2018). "SEC accuses Theranos of 'elaborate, years-long fraud'". The Washington Post. Retrieved April 4, 2019.
  20. ^ a b c Mole, Beth (June 15, 2018). "Disgraced Theranos founder Elizabeth Holmes indicted on criminal charges". Ars Technica. Retrieved June 17, 2018.
  21. ^ Kosoff, Maya. "Theranos's Former President Has a Jaw-Dropping Explanation for Why He's Innocent". The Hive. Retrieved 2018-06-21.
  22. ^ a b Carreyrou, John (2018-05-18). "Theranos Inc.'s Partners in Blood". The Wall Street Journal. Retrieved 2019-04-08.
  23. ^ Carreyrou, John (March 14, 2018). "Theranos, founder Elizabeth Holmes charged with fraud by SEC". Marketwatch. Retrieved June 17, 2018.
  24. ^ Storey, Kate (2019-03-18). "Sunny Balwani Played an Important Role in the Elizabeth Holmes Theranos Story". Esquire. Retrieved 2019-04-08.
  25. ^ Alicia Lutes (March 18, 2019). "Elizabeth Holmes & Sunny Balwani's Confusing Relationship, Explained". Refinery29. Retrieved April 4, 2019.

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