Theranos Ex-President Balwani Pins Defense on Crippled Database
Theranos Ex-President Balwani Pins Defense on Crippled Database
(Bloomberg) -- Theranos Inc. founder Elizabeth Holmes jolted her trial with allegations her former boyfriend abused her. His defense to fraud charges revolves around making a dead database look bad.
Following Holmes’s conviction in January for defrauding investors in her blood-testing startup, Ramesh “Sunny” Balwani, the company’s ex-president, began his trial Tuesday over the same criminal charges she faced.
Balwani’s lawyer said in his opening argument that the government can’t back up its claim that the former executive lied to investors and patients about the accuracy of Theranos blood tests.
While jurors are sure to hear from patients who received inaccurate tests, Stephen Cazares argued, prosecutors are cherry-picking the thinnest fraction of bad results and ignoring millions of other tests that were recorded in a Theranos database.
“Every shred of facts and details” about as many as 9 million Theranos patient tests was contained in the database, Cazares said. “The government did not analyze the data.”
What the lawyer didn’t spell out -- and jurors will soon learn about in great detail -- is that the database went irretrievably dark in 2018, the same year Holmes and Balwani were indicted.
Balwani’s attorneys claim the government is responsible for allowing the database to be crippled, while prosecutors say a “double-encrypted” ruse and dismantling of hardware thwarted their attempt to reconstruct the data. The jury will hear debate over who’s at fault for the lost data in the weeks ahead.
“If the government can’t show any misconduct by Balwani in the destruction of the database, this could be a powerful defense,” said Andrey Spektor, a criminal defense lawyer not involved in the case.
The strategy could prove problematic for Balwani, however, if the government presents strong evidence that someone close to him, including Holmes, was involved in rendering the database inoperative, Spektor said. “You are, after all, the company you keep,” he said.
In the prosecution’s opening argument, Assistant U.S. Attorney Bob Leach went to great lengths to tie Balwani to Holmes, depicting the alleged fraud as a conspiracy between the two, deepened by their secret romance.
Balwani assumed supervision of Theranos’s laboratories, Leach said, without any previous experience in blood testing or medical background.
“What he did have was a connection to Elizabeth Holmes,” Leach told the jury. Balwani was her romantic partner since around the time Holmes founded Theranos in 2003 until 2016, he said. “The evidence will show that Balwani and Ms. Holmes were partners in virtually everything -- including their crimes.”
Just as Holmes at her trial blamed Balwani for mismanaging the company’s operations, Cazares left plenty of room for him to point a finger at her. “Sunny Balwani did not start Theranos, he did not control Theranos, he did not have final decision-making ability at Theranos,” the lawyer told jurors.
The allegations Holmes raised at her trial that Balwani psychologically and sexually abused her for a decade aren’t expected to resurface at his trial. Balwani has denied the abuse claims.
The case is U.S. v. Holmes, 18-cr-00258, U.S. District Court, Northern District of California (San Francisco).
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