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In a one-two punch on Monday, a federal judge rejected efforts by Theranos founder and CEO Elizabeth Holmes and her business partner and ex-lover Ramesh "Sunny" Balwani to avoid their imminent sentencing dates.
Elizabeth Holmes, former CEO of Theranos, arrives at the federal courthouse in San Jose on Oct. 1, 2021. Courtesy Harika Maddala/Bay City News.
Holmes, convicted of four counts of wire fraud based on her misleading statements about the now-defunct company's blood-testing technology, had moved for a new trial based largely on a surprise visit paid by the prosecution's star witness, Adam Rosendorff, to her residence in August of this year.
Rosendorff, apparently hoping to meet directly with Holmes, instead spoke with her partner, William Evans.
According to Evans, Rosendorff said that at the trial he "tried to answer the questions honestly but that the prosecutors tried to make everybody look bad." Rosendorff appeared distressed and said that he "felt like he had done something wrong.
U.S. District Judge Edward Davila held a limited evidentiary hearing in October to explore whether Rosendorff's statements reflected any misconduct by government prosecutors or meant that he had not testified truthfully during the trial last year.
In his Monday order, Davila found that Rosendorff, who returned to court to testify in person at the evidentiary hearing, testified credibly that the government was "comprehensive" and not "cherry picking or being selective" when it presented his testimony at trial.
Rosendorff's testimony at the evidentiary hearing undercut Holmes' interpretation of his comments to Evans and "would defy any efforts to construe a specific instance where the government had misrepresented evidence."
Therefore, Davila wrote, "a new trial is not warranted."
Holmes also sought a new trial based on prosecutors' arguments to the jury during Balwani's case, to the effect that Balwani had "a lot of influence" over Holmes. Holmes argued that this position by prosecutors undermined any finding as to her own personal knowledge and fraudulent intent with respect to her representations to investors.
Davila wrote in his order that the prosecutors' arguments were not "inconsistent with those the government made in" Holmes' trial and that it was unlikely that a new jury hearing about prosecutors' statements would reach a different conclusion, pointing to Holmes' own testimony that "Balwani did not force her to make any of the statement to investors or journalists" that were the basis for her conviction.
Davila also denied a third motion by Holmes seeking a new trial based on prosecutors' failure to produce certain emails about the loss of the Theranos patient database.
Davila concluded that Holmes and her lawyers already had the information regarding the government's unsuccessful efforts to recover that database and that the new information would not "have changed the course of the trial."
Earlier in the day, Davila denied Balwani's motion for a judgment of acquittal. Balwani was convicted of all 12 counts of wire fraud, including the four counts involving patients on which Holmes was acquitted and the three on which the jury in her case did not reach a unanimous verdict.
Balwani's motion for acquittal was made orally, without any additional written briefs, and without a request for argument.
In sweeping language denying Balwani's motion but describing the case against both Balwani and Holmes, Davila wrote that the evidence "supports the jury finding that Mr. Balwani's and Ms. Holmes' objective was to secure investor money to support the company through fraud."
Although Holmes was not convicted of conspiracy to defraud patients, Davila wrote that a reasonable jury could also find "that Mr. Balwani and Ms. Holmes agreed to defraud patients to gain money."
Holmes is scheduled to be sentenced on Nov. 18.
Balwani, originally set to be sentenced before Holmes, on Nov. 15, secured a three-week delay until Dec. 7 to allow more time for a pre-sentence investigation report.
