Outcome Health leaders convicted on federal fraud charges
Apr 11, 2023, 10:49 AM | Updated: 12:12 pm
CHICAGO (AP) — Jurors found three former leaders of a Chicago-based company guilty of multiple counts of fraud on Tuesday, following a 10-week federal trial that tracked Outcome Health’s rise and dramatic fall after allegations that the officials had lied to customers and investors while taking in about $1 billion.
The Chicago Tribune reported that jurors found Outcome Health co-founder and former CEO Rishi Shah guilty on 19 of 22 counts, co-founder and former president Shradha Agarwal guilty on 15 of 17 counts and former chief operating officer Brad Purdy guilty on 13 of 15 counts.
Shah, Agarwal and Purdy have not been sentenced yet.
Outcome Health targeted pharmaceutical companies, selling ads that would run on televisions and tablets which the company provided to doctors’ offices and waiting rooms. Prosecutors alleged that the executives lied about how many doctors’ offices the advertising would appear in, allowing them to overcharge advertisers and use inflated revenue figures to secure loans and investors.
The company grew from 16 employees in 2011 to more than 500 in 2017, when its value was estimated at more than $5 billion.
Defense attorneys for the three former executives argued that the blame should fall on another official who previously pleaded guilty to one count of wire fraud and testified against them. Prosecutors during the trial showed the defendants’ communications with that person, Ashik Desai, arguing that it was proof that the three officials knew of problems within the company.
A spokesman for Shah said Tuesday that he plans to appeal and “will exhaust every avenue to overturn this result.”
An attorney for Purdy, Theodore Poulos, said they are “profoundly disappointed” with the verdict and reiterated his defense argument from trial that evidence showed “certain critical information was withheld” from Purdy.
Lawyers for Agarwal declined to immediately comment.