The Sunny Balwani Trial Begins: He’s Pretty Much Screwed

On January 7, just days after a jury found Theranos founder, Elizabeth Holmes, guilty on four counts of defrauding investors, US District Judge Edward Davila convened a hearing over


to discuss a delay in the trial of her codefendant, Ramesh “Sunny” Balwani. 

Balwani, the former president of Theranos and ex-boyfriend of Holmes, had already been much discussed in the judge’s fifth-floor courtroom in San Jose, California. During her monthslong trial, Holmes and her lawyers had spent considerable time and energy trying to shift the blame for the startup’s lies and deceptions onto Balwani, saying he had coerced his younger, impressionable paramour into criminal acts. But until the hearing, Balwani had been neither seen nor heard from.

So it was a bit of a shock to witness him in real time, framed in a Zoom window surrounded by his lawyers, the judge, and government prosecutors. Balwani wore rimless glasses, a tie, and a scowl. He said nothing, his lips pressed in an almost perfectly flat line for the entire hearing. His only personal flourish was his name in the corner of the screen: “Sunny B.”

Jeffrey Coopersmith, Balwani’s lawyer, affected annoyance that his client’s trial date was being pushed back yet again. Balwani and Holmes had been arraigned together in mid-2018, but since then his trial had been delayed three times: first because he requested to be tried separately from Holmes, then by her pregnancy, and again by the tardy conclusion of her trial. Now, it was the Omicron coronavirus variant that was putting the brakes on things. “Mr. Balwani has been waiting a very long time,” Coopersmith complained.

Sunny B scowled.

Davila, unmoved by Coopersmith’s pleading, said he wouldn’t resume jury trials until federal caseloads receded. “I realize commercial entities are trying to make money and to show normalcy,” he said. “The courts are not a profit-driven organization. I’m doing the best I can.” 

Sunny B scowled.

This week, as Balwani’s trial gets underway in San Jose, Sunny B is finally getting his day in court. In fact, given that his trial is likely to be a replay of what Davila habitually referred to as “the Holmes matter,” Balwani is about to get many, many days in court. The proceedings are expected to drag on for as long as four months, as they did for Holmes. He stands accused of the same 12 counts as Holmes. The same team of assistant US attorneys is set to prosecute him, in the same courtroom, in front of the same judge. Only the jurors and the defense attorneys will be different, though Balwani’s top two lawyers, Coopersmith and Amy Walsh, attended nearly every day of the Holmes trial, sitting in the gallery alongside headline-seeking journalists and thrill-seeking spectators.

In fact, Balwani’s scowl is the most glaring difference between the two proceedings. While Holmes projected an image of a smiling, youthful new mom and beloved daughter, routinely entering and exiting the court holding hands with her mother, Balwani is an older, heavyset man known for his nasty temper. “Balwani shares all of Holmes’ liabilities but benefits from none of her sympathetic qualities,” says George Demos, a former enforcement attorney with the Securities and Exchange Commission.

In the sympathy department, it doesn’t help Balwani that his trial coincides with the release of the


series “The Dropout.” with Amanda Seyfried in the title role. Balwani, by contrast, is played to sinister effect by Naveen Andrews, who captures his domineering nature and penchant for high-decibel cursing. Jurors, of course, aren’t supposed to be watching a dramatization of the defendant’s life. But the timing of a narrative that portrays Balwani as the tyrant Holmes presented at trial is less than fortuitous.

Casting aside, the Balwani trial will most likely follow a familiar script. “I expect the government’s case to look very similar to what it did in the Elizabeth Holmes trial,” says Ellen Kreitzberg, a law professor at Santa Clara University. “They know what works. They may trim some of it down. There was a lot of duplicative material.” Kreitzberg, who served as a consultant to the original podcast version of “The Dropout” and attended much of the Holmes trial, thinks the significant difference in the government’s case will be that Balwani had even more influence than Holmes over financial matters at Theranos. “Everyone agreed that was his bailiwick,” she says.

Holmes, in fact, was convicted of fraud even though the testimony in her trial made clear that she was sometimes checked out on the details of her criminal enterprise. Balwani, who served as the company’s chief operating officer, will have recourse to no such defense. Brian Grossman, a hedge fund manager who testified that Holmes deceived him despite his attempts to perform due diligence on Theranos, actually made an even more damning case against Balwani. Holmes, he told the court, made only a brief appearance at his second face-to-face meeting at Theranos, while Balwani actively discouraged him from contacting the startup’s partners and stymied his efforts to tour a Theranos lab. Defrauding Grossman was one of the four counts Holmes was convicted of — a fact that doesn’t bode well for Balwani.

Balwani’s strategy will be to attempt to disassociate himself from the crimes Holmes was found to have committed. In pretrial motions, for instance, his attorneys have attempted to exclude any mention of the “altered reports” from pharmaceutical companies that Holmes acknowledged doctoring, arguing that her actions had nothing to do with him. Prosecutors, for their part, have insisted the very nature of a “co-schemer” is to share liability for any crimes. “To the extent Defendant is asserting that he did not read or closely pay attention to the modifications made to the reports,” they wrote, “that is not a bar to their admissibility.”

Balwani’s case is unlikely to attract the same kind of media attention as the Holmes trial, which featured banks of camera crews and lookalike supporters cosplaying outside the courthouse. It’s also unlikely to match the explosive testimony of its predecessor, most notably when Holmes took the stand to reveal she had been raped as a Stanford student — and then, she testified, by Balwani. Commentators have been split on whether Holmes will testify against Balwani. Cooperating might help her at sentencing, scheduled for September 26, but also could jeopardize a likely appeal.

There was speculation, before the trial, that Balwani might reach an 11th-hour plea agreement with the government. But Balwani lost any leverage he had months ago, when he declined to cooperate with the government against Holmes. And now that Holmes has been convicted, prosecutors have a high degree of confidence they can achieve the same outcome with him.

Balwani’s legal team appears to be settling in for the long haul. In a pretrial motion, his lawyers asked Davila for permission “to bring in a mini-refrigerator and a table-top printer for the attorney breakroom, along with water and coffee to be stored in the breakroom.” They promised to remove all equipment and refreshments at the trial’s conclusion.

Davila, known for his accommodating manner, granted the motion.

Source News