U.S. District Judge Edward Davila said the financial statements drawn up by Balwani “weren’t just projections, they were lies” and that they were “a true flight from honest business practices.”
The case cast a spotlight on Silicon Valley’s dark side, exposing how its culture of hype and boundless ambition could veer into lies.
Balwani spent six years as Theranos' COO, during which he remained romantically involved with Holmes. The two had a bitter split in 2016. Both could have received up to 20 years in prison.
While on the witness stand in her trial, Holmes accused Balwani, 57, of manipulating her through years of emotional and sexual abuse, allegations that Balwani's attorney has denied.
The two trials had somewhat different outcomes. Unlike Balwani, Holmes was acquitted on several charges of defrauding and conspiring against people who paid for Theranos blood tests that produced misleading results and that could have pointed patients toward the wrong treatment. The jury in Holmes’ trial also deadlocked on three charges.
Balwani, on the other hand, was convicted on all 12 felony counts, and received nearly two additional years, despite his lawyers seeking a far more lenient sentence of just four to 10 months in prison.
Federal prosecutors also want the judge to order Balwani to pay $804 million in restitution to defrauded investors — the same amount sought from Holmes. Davila deferred a decision on restitution to a later hearing, just as he did during Holmes' Nov. 18 sentencing, when she received 11 years and three months in prison.
In court documents, Balwani's lawyers painted him as a hardworking immigrant who moved from India to the U.S. during the 1980s to become the first member of his family to attend college. He graduated from the University of Texas in 1990 with a degree in information systems.
He later moved to Silicon Valley, where he first worked as a computer programmer for Microsoft before founding an online start-up that he sold for millions of dollars during the dot-com boom of the 1990s.
Balwani and Holmes met in 2003, around the same time she dropped out of Stanford University to start Theranos. He became enthralled with her and her quest to revolutionize health care.
Balwani's lawyers said he ended up investing about $5 million in a stake in Theranos that eventually became worth about $500 million on paper — a fraction of Holmes' one-time fortune of $4.5 billion.
That wealth evaporated after Theranos began to unravel in 2015 amid revelations that its blood-testing technology never worked as claimed by Holmes, who at the time was featured in a slew of glowing magazine articles likening her to Steve Jobs and other Silicon Valley visionaries.
Before Theranos' downfall, Holmes teamed up with Balwani to raise nearly $1 billion from deep-pocketed investors.
"Mr. Balwani is not the same as Elizabeth Holmes," his lawyers wrote in a memo to the judge. "He actually invested millions of dollars of his own money; he never sought fame or recognition; and he has a long history of quietly giving to those less fortunate." Balwani's lawyers also asserted that Holmes "was dramatically more culpable" for the Theranos fraud.
Echoing similar claims made by Holmes' lawyers before her sentencing, Balwani's attorneys argued that he has been adequately punished by the intense media coverage of Theranos.
Balwani "has lost his career, his reputation and his ability to meaningfully work again," his lawyers wrote.
Federal prosecutors cast Balwani as a ruthless, power-hungry accomplice in crimes that ripped off investors and imperiled people who received flawed results. The blood tests were to be available in a partnership with Walgreens that Balwani helped engineer.
"Balwani presented a fake story about Theranos' technology and financial stability day after day in meeting after meeting," the prosecutors wrote in their memo to the judge. "Balwani maintained this façade of accomplishments, after making the calculated decision that honesty would destroy Theranos."
