Two Indian-origin executives of a Chicago-based start-up have been convicted by a federal jury in the US of running $1 billion corporate fraud scheme that targeted the company’s clients, lenders, and investors. Outcome Health founders featured in the Hurun Global Rich of List of youngest self-made billionaires in 2018. Founded in 2006, Outcome installed television screens and tablets in doctor’s offices and then sold advertising space on those screens.
Following a 10-week-long trial, jurors found health technology company Outcome Health co-founder and former CEO Rishi Shah, co-founder and former president Shradha Agarwal and former chief operating officer Brad Purdy guilty. Shah, 37, was convicted of 5 counts of mail fraud, 10 counts of wire fraud, 2 counts of bank fraud and two counts of money laundering. Agarwal, 37, was convicted of 5 counts of mail fraud, 8 counts of wire fraud, and 2 counts of bank fraud.
The defendants face a maximum penalty of 30 years in prison for each count of bank fraud and 20-year imprisonment for each count of wire fraud and mail fraud. Shah faces a maximum penalty of 10 years in prison for each count of money laundering. A sentencing hearing will be scheduled at a later date.
A statement issued by the Justice Department said that the company installed television screens and tablets in doctors’ offices around the US and then sold advertising space on those devices to clients, most of whom were pharmaceutical companies.
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 the company also inflated metrics that purported to show how frequently patients engaged with the company’s tablets installed in doctors’ offices. According to the trial evidence, the scheme targeting the company’s clients began in 2011, lasted until 2017, and resulted in at least $ 45 million of overbilled advertising services.