SAN JOSE (CBS SF/CNN) -- Act 2 of the real-life, high-stakes melodrama surrounding the rapid rise and stunning fall of Theranos, once heralded as a gamechanger in the medical testing world, was set to begin this week with opening statements in the federal fraud trial of former company president Ramesh "Sunny" Balwani.
Opening statements were expected to get underway Wednesday, more than two months after Theranos founder and former CEO Elizabeth Holmes was found guilty on four of 11 charges in her criminal fraud trial. She is currently awaiting her September sentencing.
During her trial, Holmes placed much of the blame on her former boyfriend. Under oath, Holmes claimed Balwani had abused her, psychologically and sexually, over the course of their decade-long romantic relationship.
Balwani, who also served as Theranos' chief operating officer, was first indicted alongside Holmes nearly four years ago on the same set of charges. Federal prosecutors had hoped to try the two Theranos executives together, but their cases were severed after Holmes indicated she planned to point the finger at Balwani.
He faces a dozen federal wire fraud and conspiracy charges over allegations he knowingly misrepresented the capabilities of Theranos' blood testing technology to investors, doctors and patients in order to take their money. If convicted, Balwani faces up to 20 years in prison as well as a fine of $250,000 plus restitution for each count of wire fraud and each conspiracy count.
Balwani is less of a household name than Holmes, a onetime tech industry icon who was featured on magazine covers and has been the subject of documentaries, podcasts and, most recently, "The Dropout," a limited series on Hulu. But his trial could offer new glimpses into his relationship with Holmes and the decision-making process inside the C-suite at Theranos.
"It'll be interesting to see what, if any, specific defenses Balwani raises and whether he goes after her as much as she went after him," said Michael G. Freedman, a white collar defense attorney who has represented high-profile defendants such as Bill Cosby.
Theranos claimed it had developed technology that could accurately and efficiently conduct a range of health tests using just a few drops of blood taken by the fingertip. At its peak, Theranos was valued at $9 billion, with prominent investors such as media mogul Rupert Murdoch and Walmart's Walton family. It also struck retail partnership deals with Walgreens and Safeway.
But it all began to unravel following an October 2015 Wall Street Journal investigation that showed its technology didn't work as promised. Theranos ultimately dissolved the business in September 2018.
Balwani first met Holmes in 2002 before she dropped out of Stanford to pursue the startup in 2004. Nearly 20 years her senior, Balwani served as an informal adviser to Holmes in Theranos' earliest days and the two became romantically involved.
In 2009, Balwani had guaranteed a "multimillion-dollar loan" to the startup, according to court filings, and took on a formal role as president and chief operating officer. He served in that capacity until 2016, when he left the company. Throughout that time, the two largely kept their relationship hidden.
In 2018, Theranos and Holmes settled "massive fraud" charges with the Securities and Exchange Commission. Balwani is fighting those charges.
The back-to-back trials create an unusual dynamic for Balwani's case, according to legal experts.
"It becomes sort of like a game of chess," said Freedman, a former federal prosecutor.
He cited the defense's unique advantage of having been able to observe Holmes' trial, while also pointing out that the government, too, was able to see how its case was received by Holmes' jurors.
With Holmes' trial, federal prosecutors stressed to jurors that the buck stopped with her as CEO. This time, Balwani will become the focal point as federal prosecutors seek to convince jurors through evidence and witness testimonies of his intent to deceive doctors and patients.
The list of possible witnesses who could be called during the trial includes many of the same big name investors, political figures and retail executives as were floated with the Holmes' trial, with at least one exception. Henry Kissinger, the 98-year-old former Secretary of State who once served on Theranos' board, has been crossed off the list, according to a court filing of a drafted juror questionnaire.
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