More

Social Media

Saturday, July 13, 2024

2 Indian-Americans sentenced for $1 billion fraud at Chicago-based health firm

Former executives of Outcome, a health tech startup, were sentenced for a $1 billion fraud scheme involving overbilling clients and falsifying advertising metrics, impacting investors and lenders.

In Short

  • Fraud involved $1 billion in funds
  • Co-founder Rishi Shah gets 7.5 years prison
  • Shradha Agarwal sentenced to 3 years halfway house

Two Indian-origin people, the former executives of a Chicago-based health technology start-up company, were sentenced on charges of being involved in a fraud scheme allegedly targetting the company’s clients, lenders, and investors.

According to the US Department of Justice, the charges involved approximately $1 billion (Rs 7500 crore in Indian currency) in fraudulently obtained funds.

The accused were identified as 38-year-old Rishi Shah – the co-founder and former CEO of Outcome, and 38-year-old Shradha Agarwal, a co-founder and former president of Outcome.

Another person, 35-year-old Brad Purdy – the former chief operating officer and chief financial officer of Outcome, was also among the accused.

While Rishi was sentenced on June 26 to seven years and six months in prison, Shradha was sentenced on June 30 to three years in a halfway house.

Brad was also sentenced on June 30 to two years and three months in prison.

According to court documents and evidence presented at trial, Outcome, which was founded in 2006 and known as Context Media prior to January 2017, installed television screens and tablets at doctors’ offices across the United States and then sold advertising space on those devices to clients, most of which were pharmaceutical companies.

Shah, Agarwal, and Purdy sold advertising inventory which the company did not own, to Outcome’s clients, and then under-delivered on its advertising campaigns. Despite these under-deliveries, the company still invoiced its clients as if it had delivered in full.

An official release in the case suggested Shah, Agarwal, and Purdy lied or caused others to lie to conceal the under-deliveries from clients and make it appear as if the company was delivering advertising content to the number of screens in the clients’ contracts. Purdy and others at Outcome also inflated metrics that purported to show how frequently patients engaged with Outcome’s tablets installed at doctors’ offices.

According to the trial evidence, the scheme targeting Outcome’s clients began in 2011 and lasted until 2017, and resulted in at least $45 million of overbilled advertising services.

Shah, Agarwal, and Purdy also defrauded Outcome’s lenders and investors, the release stated.

The under-delivery to Outcome’s advertising clients resulted in a material overstatement of Outcome’s revenue for the years 2015 and 2016.

In April 2023, a federal jury convicted Shah, Agarwal, and Purdy.

While Shah was convicted of five counts of mail fraud, 10 counts of wire fraud, two counts of bank fraud, and two counts of money laundering, Agarwal was convicted of five counts of mail fraud, eight counts of wire fraud, and two counts of bank fraud.

Three other former Outcome employees also pleaded guilty prior to trial. 

I am the CEO founder of Page3news worldwide & Page3news foundation. Believe in simple living & high thinking.
Page3news is the first multilingual worldwide newspaper based in Thailand and is making news touch the truth without any fear, without any pressure.

Mr King (Parvinder Singh)
Founder & CEO - Page3News Worldwide
&
Dr. Monruedee Sommart
Co-Founder Page3news Worldwide

Email : [email protected]