Theranos exec Sunny Balwani sentenced to 13 years in prison
techcrunch.com
techcrunch.com
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.
Unlike the jury at Holmes’ trial, the jury at Balwani’s trial held him accountable for defrauding patients, not just investors.
> 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.
although his rescuers got busted, but let's hope he will make them whole eventually.
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.
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.
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.
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.
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).
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.
Someone like Sunny can't realistically just drive to and walk across the border.
There is a lot more to the DHS apparatus than simply scanning passports. Most of it is unseen by the public.
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 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?
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!
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.
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.
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'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.
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.
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.
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.
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.
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.)
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.
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'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).
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.
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.
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 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"?
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.
Obviously people were harmed but it was a criminal case.
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?
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.
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.
The reason Sunny got a longer sentence is that unlike Holmes, he was convicted of lying to patients, not just investors.
A legitimate startup morphed into a fraud, coincidentally not long after Sunny joined and started secretly dating her.
I kid you not. This was an actual defense for Holmes.
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.
I guess that text really bit him at the jury trial. Held him liable for defrauding both investors and patients unlike the CEO.
> 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.
So, there's precedent for an appeal?
> Balwani will likely appeal this ruling. Most defendants do.
Hence I note the faint stench of Denmark in there somewhere.
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.