Sunny Balwani is delaying detention while he appeals the Theranos fraud conviction

Sunny Balwani is delaying detention while he appeals the Theranos fraud conviction

  • Finance
  • March 17, 2023
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Former Theranos CEO Ramesh “Sunny” Balwani found an escape hatch Thursday ahead of the scheduled start of his nearly 13-year sentence for a blood test scam he devised with his former boss and lover, Elizabeth Holmes.

Just hours before Balwani was due to surrender to authorities, his attorney filed documents advising US District Judge Edward Davila that he would not do so.

The notice cited a last-minute appeal of a recent Davila ruling that denied Balwani’s request for release while trying to overturn his conviction on 12 counts of fraud and conspiracy. Wednesday’s appeal of Davila’s March 9 sentence triggered an automatic waiver of his jail report date, which had been set for Thursday 2 p.m. Pacific time.

That’s because Balwani, 57, has been out on bail since a jury sentenced him last July, triggering a clause allowing him to stay out of jail until the Ninth Circuit Court of Appeals ruled Davilas Balwani’s attorney, Jeffrey Coopersmith, said the statement weighed up last week’s decision.

It is unclear how long it will take for the court of appeals to hear the verdict.

Terminal Island Prison

If and when he goes to jail, Balawani will serve his time at a facility near a Southern California port, according to other documents filed by Coopersmith on Wednesday. This target represents a shift from the Atlanta prison originally assigned to Balwani by the authorities.

The change means Balwani will be based in Terminal Island Jail in San Pedro, California, about 30 miles from downtown Los Angeles. The prison has incarcerated several other prominent figures, including gangster Al Capone in the 1930s, apocalyptic cult leader Charles Manson for a car theft in the 1950s, and LSD evangelist Timothy Leary in the 1970s.

In a filing last week, Coopersmith asked Davila for additional time to appeal the Bureau of Prisons’ decision to send him to the Atlanta facility, which has been dogged by allegations of widespread misconduct and other abuses. Davila had recommended Balwani be taken to a Lompoc jail in Santa Barbara County, about 250 miles from the San Jose courtroom where his trial was being held.

Holmes is also looking for delay

Holmes, 39, and her attorneys will have their chance to persuade Davila to delay the April 27 scheduled start of her more than 11-year sentence during a hearing scheduled for Friday morning in San Jose, Calif .

It will be Holmes’ first court appearance since giving birth to the child she was carrying at the time of her November 18 conviction on four counts of fraud and conspiracy.

Although they had separate trials, Holmes and Balwani were charged with essentially the same crimes, centered on a ploy that touted Theranos’ blood testing system as a revolutionary breakthrough in healthcare. The claims helped the company become a Silicon Valley sensation, raising nearly $1 billion from investors.

But its technology never worked nearly as Holmes and Balwani boasted, leading to the scandalous collapse of Theranos and a criminal case that shed a bright light on Silicon Valley’s greed and hubris.

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