The company's former COO was found guilty of all 12 criminal fraud charges.
As the verdict was read at the US District Court in San Jose, California, Balwani stared straight ahead and didn't react. The family members were by his side as they consoled him.
The jury deliberated for 5 days. Balwani sat next to his defense attorneys while the judge looked at the verdict.
The witnesses painted Balwani as an accessory to the crime.
Balwani has not yet been sentenced. There is a maximum sentence of 20 years in prison for each wire fraud count. Balwani is expected to appeal.
The trial was delayed because of the swine flu. There were 24 government witnesses who painted Balwani as an accessory to his ex- girlfriend.
In an effort to keep the struggling company afloat, prosecutors said Balwani and Holmes bilked hundreds of millions of dollars from investors and patients. Balwani oversaw the grossly inflated financial projects, the lab operations and the doomed Walgreens deal. The company promised to make blood testing cheaper, faster and less painful.
The assistant U.S. attorney said in his closing argument that Balwani was not a victim. The biggest threat to fraud is the truth.
An Arizona physician who used Theranos and an information technology consultant who testified about a missing database were both called to testify. He didn't testify in his own defense.
A jury found him guilty of conspiracy to commit wire fraud against investors and three counts of criminal wire fraud. The jury found her not guilty on the charges. She is on bail while she waits for her sentencing.
The former Silicon Valley executives raised nearly $1 billion from powerful investors, which included Murdoch, Ellison, Lucas, and the family of the former Secretary of Education.
Notable names on the board of directors include former Secretary of Defense James Mattis, former Secretary of State Henry Kissinger and former Senator Sam Nunn.
Jeffrey Coopersmith, a defense attorney for Balwani, said that the government hasn't proven that Balwani tried to deceive.
The jury was asked to consider why certain employees, investors and board members weren't called to testify.
Coopersmith said that they invested 100 million dollars. We didn't hear from them when they came to testify. The family's wealth manager testified in the trial.
Balwani's attorneys argued that he acted in good faith and truly believed in the capabilities of the blood-testing technology, but former employees told CNBC that he was aware of the problems.
In a July 2015 text message obtained by CNBC and read aloud in court, Balwani said he was responsible for everything. My decisions have been the same.
He acknowledged his role in the fraud by texting.
The headline was changed to reflect that Balwani is the COO of the company.
All Rights Reserved © 2024
