Theranos exec Sunny Balwani sentenced to 13 years in prison(techcrunch.com)
techcrunch.com
Theranos exec Sunny Balwani sentenced to 13 years in prison
https://techcrunch.com/2022/12/07/theranos-exec-sunny-balwani-sentenced-to-13-years-in-prison-for-defrauding-patients-and-investors/
120 comments
What is the sentencing guidelines of wire-fraud vs defrauding investors? I have a feeling that would answer this implied question.
Different juries, different outcomes for the same crimes..
Unlike the jury at Holmes’ trial, the jury at Balwani’s trial held him accountable for defrauding patients, not just investors.
Unlike the jury at Holmes’ trial, the jury at Balwani’s trial held him accountable for defrauding patients, not just investors.
fwiw, @popehat, a criminal defense attorney and former prosecutor, has repeatedly made the point that judges can, and do, take into account counts on which a defendant was not convicted, and sentence them for that conduct.
If you were someone that was a defendant in a case like this where another case finished before you that ended in prison sentence, the natural assumption would be yours is heading the same way. The psychology of that must be intense. If you're the type that accepted that fate, you can start making proper plans for your incarceration too. But these are people that scammed others, so I would assume not the type to accept that fate. I'm curious how strong the temptation to flee would be?
You can also change to pleading guilty at that point. It is very late but still has an impact on sentencing. It may also affect parole decisions.
Both Theranos execs were tried in Federal court. There's no parole in the Federal system.
This is one reason why you see generally longer "sentences" handed down in state courts (where parole is part of the picture) vs. in Federal (where the number is a more accurate representation of how long they'll be in custody).
This is one reason why you see generally longer "sentences" handed down in state courts (where parole is part of the picture) vs. in Federal (where the number is a more accurate representation of how long they'll be in custody).
Ok. They may still get a reduction for changing their plea at sentencing at least
Both almost certainly surrendered their passports at initial arrest. The time to have fled was before that point.
I think it would be safe to assume people in this high-flying financial orbit would have access to the sorts of people that could get them out of the country without a passport.
Just because you've ripped off Larry Ellison and Henry Kissinger doesn't quite grant you these kinds of globe-trotting powers.
I suppose you could always try to pay a coyote, but, uh, that's a bit of a high-risk play.
Or you could drive into Mexico, but without actually having fuck-you money and connections (These two don't), you're not likely going to stay outside of the arms of law enforcement for very long.
And if all this works out, and you end up on the run, you now have to full-sever every connection you have to anyone you know. Not a lot of fun.
Manning up and just doing the 11 or 13 years in Club Fed seems pretty attractive, compared to all that.
I suppose you could always try to pay a coyote, but, uh, that's a bit of a high-risk play.
Or you could drive into Mexico, but without actually having fuck-you money and connections (These two don't), you're not likely going to stay outside of the arms of law enforcement for very long.
And if all this works out, and you end up on the run, you now have to full-sever every connection you have to anyone you know. Not a lot of fun.
Manning up and just doing the 11 or 13 years in Club Fed seems pretty attractive, compared to all that.
I think we're underestimating just how many very skilled folks are willing to lend a great deal of discretion for the right price.
Just look at the recent Carlos Ghosn[1] situation. Former USASF operators working as Private Security Contractors smuggled him out of the country. The plot involved what appears to be close to a dozen people too, and included falsifying passenger records on multiple international flights and more.
[1] https://en.wikipedia.org/wiki/Carlos_Ghosn
Just look at the recent Carlos Ghosn[1] situation. Former USASF operators working as Private Security Contractors smuggled him out of the country. The plot involved what appears to be close to a dozen people too, and included falsifying passenger records on multiple international flights and more.
[1] https://en.wikipedia.org/wiki/Carlos_Ghosn
Ghosn, a Lebanese/French citizen, used American mercenaries to help him abscond from Japan for Lebanon, with at least an narrative (rightly or wrongly) that he wasn't allowed due process in Japan.
It's probably 2 orders of magnitude harder, in the long-term, to arrange for a high-profile American fugitive to use American mercenaries to abscond to another country.
It's probably 2 orders of magnitude harder, in the long-term, to arrange for a high-profile American fugitive to use American mercenaries to abscond to another country.
Yeah, but doesn't Ghosn still, uh, have money? Theranos was a massive fraud.
Theranos was a massive fraud, but there was plenty of real money going around. Sunny allegedly still has access to millions, for instance.
It would not be surprising if these sorts of folks squirrelled away vast sums for a "rainy day" in places that make it difficult for governments to get. Seems pretty standard operating procedure for people who are legit - not just fraudsters.
It would not be surprising if these sorts of folks squirrelled away vast sums for a "rainy day" in places that make it difficult for governments to get. Seems pretty standard operating procedure for people who are legit - not just fraudsters.
I've never had CBP check my passport when walking into Mexico. And Mexican officials are always asleep or absent when I pass through their side. No matter, all they require to enter Mexico is a US Birth Certificate (but they don't ask) lol. People leaving by private boat or plane are basically on a trust system; how the hell would they know if you're flying to Hawaii or not if headed to the Pacific, or whether you're going somewhere foreign or to Puerto Rico or the USVI if you're sailing into the Caribbean?
I'm pretty sure there's thousands a day that walk into Mexico everyday without a passport. Hell half the people in line returning to the US claim they "forgot" theirs.
Leaving is easy without a passport. And don't forgot if Sunny can get to the shores of Pakistan, he is a citizen and they must let him in, after which he can easily hide in the tribal areas. All he would need is a yacht somewhere on the multi-thousands of miles on the coastline and some friendly boats in int'l waters to refuel him.
I'm pretty sure there's thousands a day that walk into Mexico everyday without a passport. Hell half the people in line returning to the US claim they "forgot" theirs.
Leaving is easy without a passport. And don't forgot if Sunny can get to the shores of Pakistan, he is a citizen and they must let him in, after which he can easily hide in the tribal areas. All he would need is a yacht somewhere on the multi-thousands of miles on the coastline and some friendly boats in int'l waters to refuel him.
> how the hell would they know if you're flying to Hawaii or not if headed to the Pacific
Fwiw, you have scheduled flight plans and if a pilot did this deliberately they'd be reprimanded hard. You also have to land international flights in designated airports that have immigration. This wouldn't be easy to do if you're both wanted and bankrupt!
Fwiw, you have scheduled flight plans and if a pilot did this deliberately they'd be reprimanded hard. You also have to land international flights in designated airports that have immigration. This wouldn't be easy to do if you're both wanted and bankrupt!
The thousands walking across the boarder don't have the problems someone like Sunny has though, including LEO's out looking for them, facial recognition systems, flagged bank accounts and credit cards, etc.
Someone like Sunny can't realistically just drive to and walk across the border.
Someone like Sunny can't realistically just drive to and walk across the border.
You may be right. I don't have anywhere near Sunny's problems but I do have a flagged passport after I fought in the militia YPG in Syria (legal, but I seem to have been put on a list which has caused me endless issues with CBP). Alarm bells ring to the Nth degree when I enter, but as far as I can tell they don't have much mechanism to investigate pedestrians leaving. I'm guessing if they do have something it only focuses on some exceptional cases (like perhaps Sunny).
You are not currently wanted by the government - and only run into trouble after presenting a passport. This is not how a fugitive on the run would exit (or enter) a country.
There is a lot more to the DHS apparatus than simply scanning passports. Most of it is unseen by the public.
There is a lot more to the DHS apparatus than simply scanning passports. Most of it is unseen by the public.
I am fascinated to learn more about the apparatus that checks pedestrians leaving the US. I understand there is doubtlessly unseen stuff going on there. Do you have any materials or primary sources I can look at to understand what you're talking about? It has been my experience when crossing after scanning my passport the officer goes from jovial to shocked/unexpected (I don't look like or act someone who would have a flagged passport) which leads me to believe there is at least in many cases no advanced warning to them a flagged individual is approaching.
Now I know the government must surely have these systems but I think it may be doubtful how effective they've set it up to be to stop people leaving the country if by foot. The flow of people leaving the border in general is just way lower scrutiny, in my experience living in a border state. I would be shocked if the average say non-violent felon fugitive has much trouble leaving if they're not on a flight manifest.
Now I know the government must surely have these systems but I think it may be doubtful how effective they've set it up to be to stop people leaving the country if by foot. The flow of people leaving the border in general is just way lower scrutiny, in my experience living in a border state. I would be shocked if the average say non-violent felon fugitive has much trouble leaving if they're not on a flight manifest.
How did all that work? How did you hear about it and decide to help? Are you Kurdish? Were you a soldier already? Did you focus on journalism or medicine or sniping or anything?
How does the USA treat that in general? Do the people accept it, or praise it? Do they try to trick you into admitting legal problems with it? You can get back into the USA so I assume you must be a citizen?
What's your opinion on the general legality of fighting in a foreign war by choice?
Did you accomplish enough that you'd do it again?
How does the USA treat that in general? Do the people accept it, or praise it? Do they try to trick you into admitting legal problems with it? You can get back into the USA so I assume you must be a citizen?
What's your opinion on the general legality of fighting in a foreign war by choice?
Did you accomplish enough that you'd do it again?
Pakistan does not have an extraction treaty with the US, so there is no need to hide there.
Yet, Pakistan routinely cooperates with US when it suits them. Lack of extraction treaty is no guarantee of safety.
Didn't work out so well for Osama Bin Laden.
Sunny Bulwani is from India not Pakistan
He was born to Pakistani Hindu family.
Mexico has extradition agreements with the US. However it could ostensibly be a decent starting place to get fake documents and head off to begin a new life.
How much worse is it to flee now vs before? It’s not clear if Sunny is still 8 figure wealthy or not but it appears he is for now.
Balwani wasn’t going to go back to Pakistan and they wouldn’t have taken him even if he tried.
Carlos Ghosn agrees with your sentiment.
There are higher levels to the Jeffrey Epstein and Ghislaine Maxwell's story. Had the media covered the story in the manner of Johnny Depp's trial or the drama comedy roast in, The Wolf of Wall Street, soon enough, we might know Jeffrey Epstein's sentencing length.
I'm not exactly sure of the connection here?
that guy is on another level : )
> splitting his time between Paris and Tokyo and logging roughly 150,000 miles (241 400 km) in airplanes per year
even before his latest adventures, he lived a very, very intense life all over the world, including the Lebanon, which is an adventure on its own. It'd be harder to pull off for an average tech executive.
> splitting his time between Paris and Tokyo and logging roughly 150,000 miles (241 400 km) in airplanes per year
even before his latest adventures, he lived a very, very intense life all over the world, including the Lebanon, which is an adventure on its own. It'd be harder to pull off for an average tech executive.
If I'm ever a multi- billionaire, I will invest in a stand-by exfiltratiom team that is ready to get me out of whatever I get into and take me to a friendly place. If guys like Musk and Gates don't have this, their priorities are all wrong. I assume Peter Thiel does.
I'll gladly take your money to be on standby to exfiltrate you, good sir, and happily say "Sorry boss, can't be done" if you ever ask me to actually risk jail time for your privileged, billionnaire ass.
Hopefully your attitude would come to light during the interview or reference check
Good luck screening for someone dishonest enough to break the law, honest enough to go to jail for you like he promised, stupid enough to put your interests before his own, yet smart enough to rescue you from a foreign government.
Breaking the law does not make you dishonest.
Being paid to do something illegal gets you most of the way to the jail sentence to actually doing it, most of the time. So after the boss narcs you out for not doing the deed you'd be looking at jail either way.
Being paid to do something illegal gets you most of the way to the jail sentence to actually doing it, most of the time. So after the boss narcs you out for not doing the deed you'd be looking at jail either way.
First, let's explore your claim breaking the law is not dishonest. If a billionaire like Bill Gates is stuffed in a violin case and the airport officials asks me how many people will be on my flight and I don't include Bill Gates on the flight itinerary am I not being dishonest?
Second, your claim is if Bill Gates has me on retainer to break him out of jail and I don't break him out of jail I go to jail?
This is a surprising claim. You think Bill Gates goes around putting criminal activities in writing if the goal is to avoid going to jail?
You also seem to think Bill Gates wants to admit to the prosecutor that he illegally hired me to commit a crime, a seperate crime with additional jail time for Bill Gates in the hopes the prosecutor will go after me for revenge? If his goal is to stay out of jail he's going to switch goals to spending more time in jail to get back at me?
And the prosecutor is going to with a straight face announce to the world he's pressing charges on me for promising to break Bill Gates out of jail but not breaking Bill Gates out of jail? This is something you think is likely to happen?
One might almost think if Bill Gates wants to avoid jail the better strategy is hiring honest, law abiding people, avoid breaking the law, and avoid traveling to countries where you think the justice system is corrupt.
Second, your claim is if Bill Gates has me on retainer to break him out of jail and I don't break him out of jail I go to jail?
This is a surprising claim. You think Bill Gates goes around putting criminal activities in writing if the goal is to avoid going to jail?
You also seem to think Bill Gates wants to admit to the prosecutor that he illegally hired me to commit a crime, a seperate crime with additional jail time for Bill Gates in the hopes the prosecutor will go after me for revenge? If his goal is to stay out of jail he's going to switch goals to spending more time in jail to get back at me?
And the prosecutor is going to with a straight face announce to the world he's pressing charges on me for promising to break Bill Gates out of jail but not breaking Bill Gates out of jail? This is something you think is likely to happen?
One might almost think if Bill Gates wants to avoid jail the better strategy is hiring honest, law abiding people, avoid breaking the law, and avoid traveling to countries where you think the justice system is corrupt.
If breaking the law is dishonest because there are dishonest ways you can break the law, then speaking is dishonest because you can speak in ways where you tell a lie.
This breaks down because merely speaking is not sufficient to show someone is lying, just as breaking the law is not sufficient to show someone is dishonest. For instance, I can speak without dishonesty by telling the whole truth and you can break the law without dishonesty (say someone finds a pot seed on their property, and plants it -- illegal but not dishonest).
>Second, your claim is if Bill Gates has me on retainer to break him out of jail and I don't break him out of jail I go to jail?
Absolutely. It's conspiracy and this is a pretty well understood legal concept. The agreement to do the deed is the spoken part of the conspiracy and the physical taking of the money for it is the overt act needed to convict you.
note: this is for entertainment and not legal advice. I am not an attorney.
This breaks down because merely speaking is not sufficient to show someone is lying, just as breaking the law is not sufficient to show someone is dishonest. For instance, I can speak without dishonesty by telling the whole truth and you can break the law without dishonesty (say someone finds a pot seed on their property, and plants it -- illegal but not dishonest).
>Second, your claim is if Bill Gates has me on retainer to break him out of jail and I don't break him out of jail I go to jail?
Absolutely. It's conspiracy and this is a pretty well understood legal concept. The agreement to do the deed is the spoken part of the conspiracy and the physical taking of the money for it is the overt act needed to convict you.
note: this is for entertainment and not legal advice. I am not an attorney.
Do you remember the topic of discussion or are you typing replies in a vacuum?
You just argued everyone who commits a crime of conspiracy goes to jail while simultaneously arguing Bill Gates can commit a crime of conspiracy and avoid going to jail through the power of conspiracy.
Apparently everyone goes to jail for conspiracy but simultaneously Bill Gates can have people on retainers for years as part of a conspiracy and stay out of jail.
It just feels like you are typing replies for the sake of typing replies?
Also, crimes of dishonesty are dishonest, and pretending otherwise because you can imagine crimes which aren't dishonest isn't particularly convincing.
You just argued everyone who commits a crime of conspiracy goes to jail while simultaneously arguing Bill Gates can commit a crime of conspiracy and avoid going to jail through the power of conspiracy.
Apparently everyone goes to jail for conspiracy but simultaneously Bill Gates can have people on retainers for years as part of a conspiracy and stay out of jail.
It just feels like you are typing replies for the sake of typing replies?
Also, crimes of dishonesty are dishonest, and pretending otherwise because you can imagine crimes which aren't dishonest isn't particularly convincing.
well, Ghosn was successfully exfiltrated by his team, so it is possible!
although his rescuers got busted, but let's hope he will make them whole eventually.
although his rescuers got busted, but let's hope he will make them whole eventually.
sympathyFor(pretty white female pregnant with pretty white child) > sympathyFor(stinky brown man)
Given this uncomfortable fact, I'd expected Balwani to get 2-4x more than Holmes. But hope in humanity enhanced upon seeing their almost similar sentences.
Given this uncomfortable fact, I'd expected Balwani to get 2-4x more than Holmes. But hope in humanity enhanced upon seeing their almost similar sentences.
If she is out in 2-3 years then your estimate will still be right.
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I'm happy he got even more than Holmes (11 vs 13). The book made him sound worse than she was and he was the mastermind internally at keeping the staff working and building a culture of misdirection and obedience. He was firing people on an almost daily basis for a while whenever someone questioned their bullshit.
Holmes was the showpiece, who got to play the pretend female Steve Jobs visionary role to the press and investors. And naturally took most of the heat. But the house of cards would probably have fallen apart way sooner if he didn't run the show in the background.
Holmes was the showpiece, who got to play the pretend female Steve Jobs visionary role to the press and investors. And naturally took most of the heat. But the house of cards would probably have fallen apart way sooner if he didn't run the show in the background.
I disagree. She was the CEO and ultimately had the most control. She also did the most lying to investors.
We don't know what SBF will be charged with yet - but how would we feel if one of the other employees who did more of the actual transfers/faulty accounting got more of a sentence? As long as it clear that the CEO (in this case SBF) knew about the wrongdoing I think it is fair to hold them to the harshest sentence - even if they are not the "mastermind".
It's not like Holmes was a random former actress they found to be a clueless spokesperson. She was a smart person with plenty of resources and education.
We don't know what SBF will be charged with yet - but how would we feel if one of the other employees who did more of the actual transfers/faulty accounting got more of a sentence? As long as it clear that the CEO (in this case SBF) knew about the wrongdoing I think it is fair to hold them to the harshest sentence - even if they are not the "mastermind".
It's not like Holmes was a random former actress they found to be a clueless spokesperson. She was a smart person with plenty of resources and education.
> but how would we feel if one of the other employees who did more of the actual transfers/faulty accounting got more of a sentence
Sunny wasn't just one of the employees, he was essentially a cofounder and was Elizabeth's closest advisor. The book made it sound like he ran the actual company while she was distracted with the media and having dinners with politicians.
Re: SBF, he owned 90% of Alameda and was responsible for sending them FTX customer funds to cover their loses, so he will always be more guilty than the girl who ran it and likely made the actual loses. These details matter. CEO's have more control formally but who did the dirty work is most important.
Sunny wasn't just one of the employees, he was essentially a cofounder and was Elizabeth's closest advisor. The book made it sound like he ran the actual company while she was distracted with the media and having dinners with politicians.
Re: SBF, he owned 90% of Alameda and was responsible for sending them FTX customer funds to cover their loses, so he will always be more guilty than the girl who ran it and likely made the actual loses. These details matter. CEO's have more control formally but who did the dirty work is most important.
> she was distracted with the media and having dinners with politicians.
She wasn't distracted, she was the distraction, the pretty young pretend-genius (with no college degree), white blonde lady in her Steve Jobs costume.
Do you think Sunny would have gotten all those investments from old military guys?
She wasn't distracted, she was the distraction, the pretty young pretend-genius (with no college degree), white blonde lady in her Steve Jobs costume.
Do you think Sunny would have gotten all those investments from old military guys?
> Do you think Sunny would have gotten all those investments from old military guys?
You're reading far too much into the wording of my comment.
Yes, being distracted by dinners with politicians and investors was a critical part of the scam. Regardless, having a "real" company is what allowed her have that image. She just wanted to maintain the fantasy lifestyle and didn't care how. The hard day-to-day grunt work was done by Sunny, while she barely talked to employees.
VCs engage in plenty of due diligence into portfolio companies. After 5-6yrs the persuasive pitch deck + founder is no longer good enough to avoid questions. That's where well run company protects the lie long-term, the meat and potatoes.
You're reading far too much into the wording of my comment.
Yes, being distracted by dinners with politicians and investors was a critical part of the scam. Regardless, having a "real" company is what allowed her have that image. She just wanted to maintain the fantasy lifestyle and didn't care how. The hard day-to-day grunt work was done by Sunny, while she barely talked to employees.
VCs engage in plenty of due diligence into portfolio companies. After 5-6yrs the persuasive pitch deck + founder is no longer good enough to avoid questions. That's where well run company protects the lie long-term, the meat and potatoes.
CEOs are primarily sales people who exist to sell the company to investors, and to a lesser extent to employees.
A talent for strategy and execution is useful but not essential.
If you execute without selling, you don't have a company. If you sell without executing you can always write it off as a super-exciting best-effort failed adventure from which you learned a lot etc.
As long as you avoid fraud, obvs.
So yes - Holmes was the sales person who bought her own hype. Sunny seems to have been the executioner.
A talent for strategy and execution is useful but not essential.
If you execute without selling, you don't have a company. If you sell without executing you can always write it off as a super-exciting best-effort failed adventure from which you learned a lot etc.
As long as you avoid fraud, obvs.
So yes - Holmes was the sales person who bought her own hype. Sunny seems to have been the executioner.
Executor?
I'm not saying he was a random employee but he was definitely lower on the totem poll. Holmes could have had him removed from the company at any time. The same is not true of Sunny removing Holmes.
I have also read the book and agree Holmes was more into the PR stuff and investor stuff. But again - the crimes had to do with lying to investors.
I have also read the book and agree Holmes was more into the PR stuff and investor stuff. But again - the crimes had to do with lying to investors.
I feel like the biggest source of truth was inside the company. Controlling the employees is what kept it hidden for so long and an employee was what took it down. But you might be right that most of the fraud was via investors. The companies operations were just a fiction after a certain point.
She was convicted of the investor crimes, and he was convicted of the operations crimes.
>Following a three-month trial and deliberations over five days that ended in July, Balwani's jury returned guilty verdicts on all 12 charges brought by the Justice Department — seven counts of wire fraud for defrauding Theranos investors, two counts of wire fraud for defrauding paying patients, two counts for conspiring to defraud investors and patients, and one count for wire fraud related to Theranos advertisements to patients in Arizona.
I dont know the exact breakdown but seems like most of his crimes still had to do with defrauding investors. What distinction do you mean by "operations crimes"?
I dont know the exact breakdown but seems like most of his crimes still had to do with defrauding investors. What distinction do you mean by "operations crimes"?
All tort cases need someone to be the harmed by the crime. So of course the investors would be the central focus. How they pulled off the crime is how they are prosecuted though.
Running the fake company that investors put money into is as critical (or more so given the due diligence process) as persuasively asking the investors for the money.
Running the fake company that investors put money into is as critical (or more so given the due diligence process) as persuasively asking the investors for the money.
This was not a tort case.
Obviously people were harmed but it was a criminal case.
Obviously people were harmed but it was a criminal case.
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>She also did the most lying to investors.
The reason Sunny got a longer sentence is that unlike Holmes, he was convicted of lying to patients, not just investors.
The reason Sunny got a longer sentence is that unlike Holmes, he was convicted of lying to patients, not just investors.
I read the book and I disagree.
Ultimately creating a toxic work environment is not why they are going to jail, but for deceiving the public, and investors. Holmes (the person playing Steve Jobs) lead that.
I have little doubt that if the genders were reversed that Holmes sentence could be easily twice Sunny's.
Ultimately creating a toxic work environment is not why they are going to jail, but for deceiving the public, and investors. Holmes (the person playing Steve Jobs) lead that.
I have little doubt that if the genders were reversed that Holmes sentence could be easily twice Sunny's.
This - I mentioned in another thread when Holmes was sentenced that even if convicted she'll not spend that long in jail (maybe 5 years, most of it on license I would guess?). I suspect Balwani will serve most if not all of the 13 years.
I've no wish to defend either of these people given what they've done, I just think it's worth pointing out that ignoring the disparity doesn't make it go away.
I've no wish to defend either of these people given what they've done, I just think it's worth pointing out that ignoring the disparity doesn't make it go away.
I thought federal sentences did not have parole? So a person has to serve their full term.
You thought right. Parent comment is wrong. Many random “bet she won’t serve half of that” comments were corrected in the original discussion.
I'm not familiar with how this works, and I can't edit my comment now, but I learned something new today.
I'm also really trying not to believe that this will be mitigated in some other way. (Is it possible she could serve some of her sentence at home if a judge rules that way, for example? This is a genuine question btw).
I'm also really trying not to believe that this will be mitigated in some other way. (Is it possible she could serve some of her sentence at home if a judge rules that way, for example? This is a genuine question btw).
Theranos started in 2003 and had raised $200m+ before sunny joined in 2009. Fraud started before him.
Well, technically early on it was a real business and a genuine attempt to create the blood meter. It was when it became apparent it wasn't going to work but they still maintained that fiction was when it turned into a fraud.
A legitimate startup morphed into a fraud, coincidentally not long after Sunny joined and started secretly dating her.
A legitimate startup morphed into a fraud, coincidentally not long after Sunny joined and started secretly dating her.
Wasn't it always a fiction? Her premise for Theranos was to perform blood tests with minimal amount of blood even though the science wasn't there. I would love see a pitch decks for the raises prior to Sunny. How do you raise $200m when VC money was hard to come by during the recession?
You are trying way too hard to shift the blame here. I wonder why that is?
I think Holmes played a bigger role in the fraud than people give her credit for, whether she "meant to" defraud people or not, I don't think she was like "I'm gonna deceive all these people" but rather "I need to keep the money flowing so that I can develop the technology to make this a reality".
That said, of the two of them, Balwani was the true gangsta. He came in seemingly already knowing how to run a criminal enterprise, and applied those principles to Theranos.
That said, of the two of them, Balwani was the true gangsta. He came in seemingly already knowing how to run a criminal enterprise, and applied those principles to Theranos.
Holmes never and inkling of a plan to make the tech a reality. She was just a figurehead for a scam, the ICO of its day.
I read the book and also agree with this. She was the CEO, but he "ran" the company. He also put millions of his own money into it to keep it afloat. He should've been the "adult supervision", so to speak.
I've seen a lot of excuses from CEO's for why they aren't responsible for their actions but "I didn't have adult supervision" takes the cake.
Eh, Holmes was 19 when she dropped out of colleges. Despite legal adulthood, people are disproportionately stupid and/or naive at that age. It by no means excuses what she did and I think her sentence was at least reasonable and perhaps too lenient. But I think age and the lack of more experienced people with level heads around her is 1) a slight mitigating circumstance and 2) partly her own fault.
In short, adult supervision should at least be a consideration. Had she be 17 at the start, a difference of a mere two years, that might seem more clear (to some). Legal adulthood at 18 doesn’t confer some magical maturity and wisdom so we shouldn’t regard it much differently than 25-27.
To preempt arguments that this went on without Sunny for some years after she turned 19: 1) Plenty of people with some experience and maturity could have been in her circle of influence before then and 2) I did say age was only a slight mitigating circumstance.
In short, adult supervision should at least be a consideration. Had she be 17 at the start, a difference of a mere two years, that might seem more clear (to some). Legal adulthood at 18 doesn’t confer some magical maturity and wisdom so we shouldn’t regard it much differently than 25-27.
To preempt arguments that this went on without Sunny for some years after she turned 19: 1) Plenty of people with some experience and maturity could have been in her circle of influence before then and 2) I did say age was only a slight mitigating circumstance.
I don't disagree with any of what you've said here but then that means the problem is the system itself.
If teenagers aren't responsible enough to run companies, the law shouldn't allow them to run companies. Make the minimum age of running a company 25.
I imagine a lot of YCombinator founders would disagree with this, but I also imagine those same people would agree that they're responsible for their actions.
I also imagine the Carmacks/Zuckerbergs/Jobs/Gates of the world would take umbrage with such a ban.
What shouldn't happen is allowing someone leniency after fraudulently running a health company that has caused harm to innocent people.
If teenagers aren't responsible enough to run companies, the law shouldn't allow them to run companies. Make the minimum age of running a company 25.
I imagine a lot of YCombinator founders would disagree with this, but I also imagine those same people would agree that they're responsible for their actions.
I also imagine the Carmacks/Zuckerbergs/Jobs/Gates of the world would take umbrage with such a ban.
What shouldn't happen is allowing someone leniency after fraudulently running a health company that has caused harm to innocent people.
That's a deliberate over simplification of what that comment said.
It is and it isn't.
My point was that regardless of anything else going on, when you're the CEO, and your business card says "CEO", then it happened on your watch (the first rule of leadership being everything is your fault etc.)
My point was that regardless of anything else going on, when you're the CEO, and your business card says "CEO", then it happened on your watch (the first rule of leadership being everything is your fault etc.)
I was thinking the same thing. But then it occurred to me that she was behaving like a version of Steve Jobs. How would then the "adult supervision" of Steve Jobs look like? Fired on the spot? I don't think it's easy or even possible to provide adult supervision in that environment.
Seeing Steve Jobs did get fired from Apple his first time around, probably. Corporate governance is a thing, they had a board, and Balwani was on it.
He was also the one doing all the hiring and firing. Holmes was literally a figurehead who are barely in her office, busy keeping the press and investors happy so the money kept coming in.
shocked a brown male got a worse sentence than a white female for the same crime
They were charged for different crimes and had slightly different roles in perpetuating the fraud within & without the company. Whether or not young white females get more leniency isn’t even quite the issue: That assumes they might get less than deserved. That is a separate questions from whether or not a brown male got more than deserved. The questions may even have some overlap in a Venn diagram but they are not correlated 1:1.
Brown male... with 2 more degrees and decades of experience in business, who did the criminal operations.
What if Sheryl Sandberg had convinced Mark Zuckerberg to commit some sort of fraud at Facebook and they both got convicted. Can you possibly imagine Sandberg serving more time than Zuckerberg? The ages and age differences are very similar.
> "I am responsible for everything at Theranos."
I guess that text really bit him at the jury trial. Held him liable for defrauding both investors and patients unlike the CEO.
I guess that text really bit him at the jury trial. Held him liable for defrauding both investors and patients unlike the CEO.
> Mr. Balwani’s former business partner and ex-girlfriend, Theranos founder Elizabeth Holmes, was sentenced last month to 11¼ years for four counts of criminal fraud tied to her now defunct blood-testing startup.
> U.S. District Judge Edward Davila, who oversaw both trials, could choose to give Mr. Balwani more time in prison than Ms. Holmes because he was found guilty on additional counts, lawyers said. Judge Davila could find that investors suffered a larger loss due to Mr. Balwani’s fraud, or that Mr. Balwani recklessly put patients at risk of death or serious bodily injury, both of which could add years to his sentence.
> “VCs invest in very strange ways,” Judge Davila said.
So do courts apparently.
> U.S. District Judge Edward Davila, who oversaw both trials, could choose to give Mr. Balwani more time in prison than Ms. Holmes because he was found guilty on additional counts, lawyers said. Judge Davila could find that investors suffered a larger loss due to Mr. Balwani’s fraud, or that Mr. Balwani recklessly put patients at risk of death or serious bodily injury, both of which could add years to his sentence.
> “VCs invest in very strange ways,” Judge Davila said.
So do courts apparently.
I've been waiting for a Theranos post to dredge something up. On a very early Theranos post in 2013, there was a commenter who identified the company as a scam several years early. Naturally, they received minimal attention. Interestingly, though, it was the only comment they ever made. I've wondered if it was a disgruntled insider wanting the truth to come out.
https://news.ycombinator.com/item?id=6349808
https://news.ycombinator.com/item?id=6349808
It wasn't just a single commenter. Many people over the years commented here at HN that the Theranos folks were outright delusional and batshit crazy. Unfortunately, the investors and patients who ultimately joined in that collective delusion weren't really aware of HN back in the day.
[deleted]
These old comments have been analyzed to death on HN actually.
Oddly that was that account's only comment and they never commented again in the 9 years since.
That is how throwaways work..
> "It would certainly not be unprecedented if Balwani decides to appeal this ruling."
So, there's precedent for an appeal?
So, there's precedent for an appeal?
Eh, it's just clumsily worded. Here's my rewrite:
> Balwani will likely appeal this ruling. Most defendants do.
> Balwani will likely appeal this ruling. Most defendants do.
I love how I, as a lowly middle-class person, can invest money in a company and if they were pulling the wool over my eyes and I lost my investment, it’s all “oh well, buyer beware”. But let it be some big wigs investing in a disruptive tech (that makes the status quo oh so nervous) then it’s all pitchforks and fire — those devils be damned.
Hence I note the faint stench of Denmark in there somewhere.
Hence I note the faint stench of Denmark in there somewhere.
> that makes the status quo oh so nervous
Nervous? The Theranos approach could not possibly work, and serious researchers were well aware of that. There's even a completely hilarious video online where some folks point this out with the most astonishing diplomacy and politeness but nonetheless in the clearest of terms, while Holmes is forced into some sort of clumsy damage control.
Nervous? The Theranos approach could not possibly work, and serious researchers were well aware of that. There's even a completely hilarious video online where some folks point this out with the most astonishing diplomacy and politeness but nonetheless in the clearest of terms, while Holmes is forced into some sort of clumsy damage control.
Not true at all.
It's less "disruptive tech" and more "tech that didn't work and reported incorrect results".
People went to jail for Enron, no? https://en.wikipedia.org/wiki/Trial_of_Kenneth_Lay_and_Jeffr...
Surprised that he got a longer sentence than Holmes. She really must have made him out like the devil during interrogation and trial. No doubt the nasty old US American racism factored into it, too.
nice to see justice served
well deserved!
LeroyRaz(5)
https://www.npr.org/2022/12/07/1141278121/theranos-sunny-bal...
In July, a jury found Balwani guilty on all 12 felony counts of defrauding Theranos investors and the patients that used the company's unreliable blood tests.
In comparison, Holmes was convicted of four wire-fraud related counts and sentenced to a little over 11 years in prison last month.