Elizabeth Holmes and her former Theranos business partner, Ramesh Balwani, had similar charges but very different verdicts. Legal experts explain why.
- Elizabeth Holmes and Ramesh Balwani faced similar charges related to their tenures at Theranos.
- While Holmes was convicted on 4 counts, Balwani was convicted on 12 counts last week.
Former Theranos COO Ramesh "Sunny" Balwani was convicted on fraud-related charges in federal court last week. But he received a very different verdict than that of his ex-girlfriend, former business partner, and co-defendant, Elizabeth Holmes, who faced similar charges.
Up against 11 charges, Holmes received a split verdict from jurors in January. She was found guilty on four investor-related counts and acquitted on four counts related to defrauding patients and doctors. Jurors deadlocked on the remaining three charges, which concerned venture capitalists' investments in Theranos.
Balwani, on the other hand, was found guilty last week on all 12 charges brought against him.
Several factors likely contributed to the stark difference in verdicts between them, legal experts say.
For one, prosecutors tackled Balwani's case with the benefit of hindsight, having already done a trial run of their arguments against Holmes.
"The government got to essentially try the case for a second time," said Michael Weinstein, chair of the White Collar Defense Investigations Department at Cole Schotz. "So they were able to better refine their narrative."
Differences between the two defendants also likely influenced their juries.
Holmes was a 19-year-old college dropout when she built Theranos, while Balwani was twice her age. Before joining Theranos, he'd worked at Microsoft and Lotus Software and even been president of a software development startup. Holmes' much younger age and nonexistent work experience when she built Theranos let her present a naivete defense in court that Balwani couldn't use.
"With the whole notion that he got duped by her, given his age and his experience, one must ask if the jury could have found that to be a credible argument," said Jennifer Kennedy Park, a partner at Cleary Gottlieb Steen Hamilton who focuses on white collar defense.
Holmes' gender probably helped her defense, given long-standing assumptions about what crimes men and women are capable of, respectively, and the fact she'd become a mother not long before her trial began could have made a jury more sympathetic to her.
Perhaps the death knell for Balwani's defense was the fact he oversaw the lab's operations and was much more hands-on while Holmes, kept busy as the public face of the startup, couldn't be as involved in many company matters.
It's true going second may have aided Balwani in anticipating prosecutors' moves by seeing their strategy in Holmes' trial. As second-in-command at Theranos, he also could have more believably pointed the finger at Holmes than she, as CEO, could have done to him.
And while Holmes reached a level of superstardom in Silicon Valley and was the charismatic face of Theranos, the private Balwani worked in her shadow. He made far fewer public statements about Theranos' purported capabilities that could've come back to bite him during his trial.
Nonetheless, there was some indisputable evidence against Balwani.
Prosecutors presented a damning text exchange between Balwani and Holmes from 2015, the year the company began to unravel after reporter John Carreyrou, then at The Wall Street Journal, published an exposé highlighting the startup's testing woes.
"I am responsible for everything at Theranos," Balwani had written. "All have been my decisions too."
Another key difference is that Holmes took the stand and Balwani didn't. Testifying might have given Balwani a chance to directly refute some of the prosecution's claims, but it's not certain it would've helped him.
"Holmes was able to convince many others of her theories and her plans," said Kennedy Park. "If she couldn't persuade a jury, how is someone who by all accounts is less charismatic than her going to persuade a jury?"
Holmes and Balwani await sentencing in October and November, respectively. They'll both likely receive prison time.