Theranos Ex-President’s Fraud Trial Delayed by Covid Surge

(Bloomberg) -- The criminal fraud trial of former Theranos Inc. president Ramesh “Sunny” Balwani, which had been scheduled to start in February, will be delayed because of a surge in Covid cases in California, a judge said.

U.S. District Judge Edward Davila in San Jose said Friday during a hearing that the spread of the coronavirus will “push our trial back about a month.” The trial may be rescheduled to mid-March, he said.

Last week, Theranos founder Elizabeth Holmes was found guilty of criminal fraud for her role building the blood-testing startup into a $9 billion company that collapsed in scandal. Balwani and Holmes faced the same charges when they were indicted in 2018, but Davila ordered separate trials after Holmes's lawyers disclosed that part of her defense hinged on accusing Balwani of emotional and sexual abuse while the two were romantically involved.

Davila noted that federal courthouses in northern California have temporarily suspended in-person trials amid a spike in Covid cases caused by the spread of the omicron variant. The judge said potential jurors can't currently be summoned to court to fill out screening questionnaires for Balwani's trial.

Balwani's lawyer, Jeffrey Coopersmith, objected to the delay. He argued citizens in Santa Clara County, where the court is based and which has a vaccination rate of above 90%, are enjoying National Hockey League Sharks games, concerts, restaurants and bars. “Mr. Balwani's been waiting a long time,” Coopersmith said. “We just don't think it's necessary.”

Davila told Coopersmith that “there's a distinction with the courts -- we are not a profit-driven part of government.” The judge said he's sympathetic to Balwani's right to a speedy trial and acknowledged his much earlier rejection of Balwani's request to be tried ahead of Holmes. Still, Davila said, his primary concern is for the safety of everyone in the courtroom, including the public.

The judge asked lawyers for the two sides to meet and discuss new trial dates in mid or late March before a hearing scheduled for next week. “We'll all be in trial soon,” Davila said.

Balwani has pleaded not guilty and has denied Holmes's abuse allegations, which were an important part of the testimony she gave at her trial but aren't expected to re-surface at his.