Sunny Balwani delays prison while appealing Theranos fraud conviction
Former Theranos executive Ramesh “Sunny” Balwani found an escape hatch Thursday from the scheduled start of his nearly 13-year prison sentence for a blood-testing hoax he engineered with his former boss and lover, Elizabeth Holmes.
Just hours before Balwani was supposed to surrender to authorities, his lawyer filed documents notifying U.S. District Judge Edward Davila that he wouldn’t be doing so.
The notice cited a last-minute appeal of a recent Davila ruling rejecting Balwani’s request to remain free while trying to overturn his conviction on 12 counts of fraud and conspiracy. The Wednesday appeal of Davila’s March 9 ruling triggered an automatic stay of his prison reporting date, which had been set for 2 p.m. Pacific time Thursday.
That’s because Balwani, 57, has been free on bail since a jury convicted him last July, triggering a clause that allows him to remain out of prison until the Ninth Circuit Court of Appeals weighs in on Davila’s ruling issued last week, according to the notice filed by Balwani’s attorney, Jeffrey Coopersmith.
It’s unclear how long it will be before the appeals court deals with the ruling.
Terminal Island prison
If and when he is sent to prison, Balawani will serve his time in a facility near a Southern California harbor, according to other documents filed Wednesday by Coopersmith. That destination represents a shift from the Atlanta prison that Balwani had been initially assigned by authorities.
The change means Balwani will be in the Terminal Island prison located in San Pedro, California, located 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 an auto theft in the 1950s and LSD evangelist Timothy Leary in the 1970s.
In a filing last week, Coopersmith had asked Davila for additional time to appeal the Bureau of Prisons’ decision to send him to the Atlanta facility that has been dogged by allegations of widespread of misconduct and other abuses. Davila had recommended Balwani be sent to a Lompoc prison in Santa Barbara County, located about 250 miles from the San Jose courtroom where his trial took place.
Holmes seeks delay, too
Holmes, 39, and her lawyers will have their chance to try to persuade Davila to delay the scheduled April 27 start of her more than 11-year prison sentence during a hearing set for Friday morning in San Jose, California.
It will mark Holmes’ first appearance in court since giving birth to the child she was carrying at the time of her Nov. 18 sentencing on four counts of fraud and conspiracy.
Although they had separate trials, Holmes and Balwani were accused of essentially the same crimes centered on a ruse touting Theranos’ blood-testing system as a revolutionary breakthrough in health care. The claims helped the company become a Silicon Valley sensation that raised nearly $1 billion from investors.
But its technology never came close to working like Holmes and Balwani boasted, resulting in Theranos’ scandalous collapse and a criminal case that shined a bright light on Silicon Valley greed and hubris.