Sunny Balwani defers prison sentence while appeals Terranas’ fraud conviction

Former Theranos executive Ramesh “Sunny” Balwani found an escape hatch Thursday after the scheduled start of his nearly 13-year prison sentence for a blood test forgery he created with his former boss and lover of Elizabeth Holmes.

Just hours before Balwani was to turn himself in to authorities, his attorney filed documents telling U.S. District Judge Edward Davila that he would not.

The report cited a last-minute appeal of Dávila’s recent ruling denying Balwani’s request to remain free in an attempt to overturn his conviction on 12 counts of fraud and conspiracy. Wednesday’s appeal of Davila’s March 9 ruling led to an automatic suspension of his prison term, which was set for 2:00 p.m. PT on Thursday.

That’s because Balwani, 57, has been out on bail since a jury convicted him last July, triggering a clause that allows him to remain behind bars until the Ninth Circuit Court of Appeals reviews Davila’s decision , issued last week, according to a notice filed by Balwani’s attorney, Jeffrey Coopersmith.

It is not yet clear how long it will be before the appeals court deals with the decision.

Prison on Terminal Island

If and when he is sent to prison, Balawani will serve time at a detention center near a Southern California harbor, according to other documents filed Wednesday by Coopersmith. The destination represents a transfer from the Atlanta jail that Balwani was originally assigned to by authorities.

The change means Balwani will be held at Terminal Island Prison, located in San Pedro, California, about 30 miles from downtown Los Angeles. Several other high-profile figures were incarcerated, including gangster Al Capone in the 1930s, apocalyptic cult leader Charles Manson for car theft in the 1950s, and LSD propagandist Timothy Leary in the 1970s.

In a statement last week, Coopersmith asked for more time for Davila to appeal the Bureau of Prisons’ decision to send him to the Atlanta detention facility, which has been dogged by allegations of mass violations and other abuses. Davila recommended that Balwani be sent to the Lompoc jail in Santa Barbara County, about 250 miles from the San Jose courtroom where he was tried.

Holmes is also seeking a stay

Holmes, 39, and her attorneys will have a chance to try to convince Davila to delay the April 27 start of her more than 11 years in prison during a hearing scheduled for Friday morning in San Jose, California.

This will be Holmes’ first appearance in court since the birth of the child she was carrying at the time of his sentencing on November 18 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 ruse that touted Theranos’ blood-testing system as a revolutionary breakthrough in healthcare. Those claims helped make the company a Silicon Valley sensation, raising nearly $1 billion from investors.

But his technology never worked the way Holmes and Balwani boasted, leading to the scandalous collapse of Theranos and a criminal case that shone a bright light on the greed and hubris of Silicon Valley.