How the two Theranos trials led to different outcomes for Elizabeth Holmes, Sunny Balwani
NEW YORK — The federal fraud case against the top executives of the failed biotech company Theranos posed an interesting tale of two different trials, according to ABC News' Rebecca Jarvis.
Jarvis, the host and creator "The Dropout," ABC News' podcast that chronicled the case against its founder Elizabeth Holmes, spoke with "Start Here," Friday following the conviction of Ramesh “Sunny” Balwani, the former president and COO of Theranos, on fraud charges.
A jury on Thursday convicted Balwani, Holmes' former romantic partner, on 12 counts of fraud for his role in defrauding investors and patients.
The company claimed it could run any blood test using only a few drops of blood via its so-called proprietary technology. However, according to prosecutors, their product, a machine called "Edison," could never run more than a dozen blood tests at a time.
Balwani joined Theranos in 2009, six years after Holmes created the startup, and quickly rose to be its president and chief operating officer.
Holmes, who faced 11 counts of fraud, one less than Balwani, was convicted on only four counts of fraud in January, which related to investors.
The feds originally charged Balwani and Holmes together, but their trials were later severed after Holmes revealed she may testify to abuse at the hands of Balwani. He denied those allegations.
Jarvis said Holmes taking the stand was a key factor in the different outcomes.
"[The abuse claims] did not come up at his trial, but for during [Holmes'] seven days of testimony, they were a big portion of what she talked about," Jarvis told "Start Here."
"The biggest difference is that he didn't take the stand to say, 'I didn't do this,' or...raise his own objections to the claims against him."
Jarvis noted that after the federal government filed its charges against the duo, Balwani's attorney initially told her, in 2018, this was a business failure and they were in it together. Things changed once they faced separate trials and evidence such as texts and e-mails that implicated that Balwani came to light.
"You think about a jury who is supposed to know nothing about any of their backstory, and they're shown these things like...case pictures of her so much younger than him, supposedly having to rely on him for his expertise," she said.
"You can imagine where the jury may have found that presentation more sympathetic than Sunny Balwani who had experience," she said.
Holmes is scheduled to be sentenced in September and Balwani later this year. Both face a maximum sentence of 20 years in prison per count.
Holmes's attorneys have filed an appeal and Balwani's attorneys are expected to follow suit, according to Jarvis. However, Jarvis said legal scholars and other experts say those appeals are rarely successful.
However, the case will have a broader impact on the business world and how future start-ups present themselves to investors and customers, she said.
"You don't get to run a successful business on what might happen in the future. You can't tell investors what might happen in the future. You can't tell patients that your product might someday be up to snuff when it isn't," Jarvis said.
For the full backstory on Balwani, Holmes and Theranos, listen to ABC News' podcast “The Dropout.”
Copyright © 2022, ABC Audio. All rights reserved.