{"id":56893,"date":"2024-07-01T17:04:55","date_gmt":"2024-07-02T00:04:55","guid":{"rendered":"https:\/\/cjnotebook.com\/?p=56893"},"modified":"2024-07-01T17:04:55","modified_gmt":"2024-07-02T00:04:55","slug":"three-former-executives-sentenced-for-roles-in-1-billion-fraud-scheme","status":"publish","type":"post","link":"https:\/\/cjnotebook.com\/?p=56893","title":{"rendered":"Three Former Executives Sentenced for Roles in $1 Billion Fraud Scheme"},"content":{"rendered":"<div class=\"node-body\">\n<div class=\"field-formatter--text-default field-text-format--wysiwyg text-formatted field_body\">\n<figure id=\"attachment_56894\" aria-describedby=\"caption-attachment-56894\" style=\"width: 300px\" class=\"wp-caption alignleft\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-56894 size-medium\" src=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2024\/07\/cst.brightspotcdn-1-300x200.webp\" alt=\"\" width=\"300\" height=\"200\" srcset=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2024\/07\/cst.brightspotcdn-1-300x200.webp 300w, https:\/\/cjnotebook.com\/wp-content\/uploads\/2024\/07\/cst.brightspotcdn-1-768x512.webp 768w, https:\/\/cjnotebook.com\/wp-content\/uploads\/2024\/07\/cst.brightspotcdn-1.webp 840w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-56894\" class=\"wp-caption-text\"><strong>Rishi Shah, 38<\/strong><\/figcaption><\/figure>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\">Three former executives of Outcome Health, a Chicago-based health technology startup, were sentenced for their roles in a $1 billion fraud scheme targeting the company&#8217;s clients, lenders, and investors.<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 20px;\">Rishi Shah, 38, a co-founder and former CEO of Outcome, was sentenced on June 26 to seven years and six months in prison.<\/span><\/li>\n<li><span style=\"font-size: 20px;\">Shradha Agarwal, 38, a co-founder and former president of Outcome, was sentenced yesterday to three years in a halfway house.<\/span><\/li>\n<li><span style=\"font-size: 20px;\">Brad Purdy, 35, the former chief operating officer and chief financial officer of Outcome, was also sentenced yesterday to two years and three months in prison.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-3918 alignleft\" src=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2014\/06\/Department-of-Justice-300x300.png\" alt=\"Two Men Arrested for Allegedly Operating One of the Largest Synthetic Drug Smuggling Rings\" width=\"300\" height=\"300\" srcset=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2014\/06\/Department-of-Justice-300x300.png 300w, https:\/\/cjnotebook.com\/wp-content\/uploads\/2014\/06\/Department-of-Justice-150x150.png 150w, https:\/\/cjnotebook.com\/wp-content\/uploads\/2014\/06\/Department-of-Justice.png 350w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/>\u201cOutcome\u2019s former executives deceived their clients, their auditor, their lenders, and their investors for years,\u201d said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department\u2019s Criminal Division. \u201cTheir sentences should serve as yet another reminder that \u2018faking it until you make it\u2019 is not an acceptable practice for any business, whether that company is a technology start-up or a well-established corporation. Lying about your revenue to obtain customers or financing is fraud, plain and simple. The Criminal Division is committing to holding companies and their executives accountable for their misconduct.\u201d<\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-15190 alignright\" src=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/09\/FDIC-300x226.jpg\" alt=\"\" width=\"300\" height=\"226\" srcset=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/09\/FDIC-300x226.jpg 300w, https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/09\/FDIC-45x35.jpg 45w, https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/09\/FDIC.jpg 452w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/>Outcome Health, founded in 2006 and previously known as Context Media, installed TV screens and tablets in doctors&#8217; offices across the U.S., selling ad space mainly to pharmaceutical companies.<\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\">Executives Shah, Agarwal, and Purdy sold ads they didn&#8217;t have, under-delivered on campaigns, but still billed clients as if they had delivered fully. They concealed this by lying to clients, making it seem they met their contracts.<\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\">Purdy and others also inflated patient engagement metrics with the tablets. This fraud started in 2011 and lasted until 2017, leading to $45 million in overbilled services.<\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\">They also defrauded lenders and investors by overstating revenue for 2015 and 2016. Purdy had others fabricate data to hide the under-deliveries from auditors. <\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\">Using these inflated figures, they secured $110 million in debt financing in April 2016, $375 million in December 2016, and $487.5 million in equity financing in early 2017. These financings resulted in millions in dividends to Shah and Agarwal.\u00a0<\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\">A federal jury\u00a0<a href=\"https:\/\/www.justice.gov\/opa\/pr\/former-executives-outcome-health-convicted-1b-corporate-fraud-scheme\">convicted<\/a> Shah, Agarwal, and Purdy in April 2023:<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 20px;\">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.<\/span><\/li>\n<li><span style=\"font-size: 20px;\">Agarwal was convicted of five counts of mail fraud, eight counts of wire fraud, and two counts of bank fraud.<\/span><\/li>\n<li><span style=\"font-size: 20px;\">Purdy was convicted of five counts of mail fraud, five counts of wire fraud, two counts of bank fraud, and one count of false statements to a financial institution.<\/span><\/li>\n<\/ul>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\">Three other former Outcome employees pleaded guilty prior to trial.<\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-14844 alignright\" src=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/08\/FBI-Logo-300x225.jpg\" alt=\"La Cosa Nostra Convicted Felon Admits to Drug, Prostitution and Weapons Charges\" width=\"300\" height=\"225\" srcset=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/08\/FBI-Logo-300x225.jpg 300w, https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/08\/FBI-Logo-45x35.jpg 45w, https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/08\/FBI-Logo.jpg 640w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/>Ashik Desai, the former chief growth officer, pleaded guilty to one count of wire fraud. Kathryn Choi, a former senior analyst, and Oliver Han, a former analyst, both pleaded guilty to conspiracy to commit wire fraud. Desai will be sentenced on Sept. 20. Choi and Han will be sentenced on Oct. 4 and Oct. 11, respectively.<\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\">The FBI and FDIC-OIG investigated the case.<\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\">Assistant Chief Kyle C. Hankey of the Criminal Division\u2019s Fraud Section and Assistant U.S. Attorneys Jason Yonan, Corey Rubenstein, and William Hogan for the Northern District of Illinois prosecuted the case.<\/span><\/p>\n<p style=\"text-align: center;\"><span style=\"font-size: 20px;\">Former Assistant Chief William E. Johnston of the Criminal Division\u2019s Fraud Section and former Assistant U.S. Attorneys Matthew F. Madden and Saurish Appleby-Bhattacharjee for the Northern District of Illinois also prosecuted the case through trial.<\/span><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Three former executives of Outcome Health, a Chicago-based health technology startup, were sentenced for their roles in a $1 billion fraud scheme targeting the company&#8217;s clients, lenders, and investors. Rishi Shah, 38,&#8230;<\/p>\n","protected":false},"author":1,"featured_media":56894,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-56893","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Three Former Executives Sentenced for Roles in $1 Billion Fraud Scheme<\/title>\n<meta name=\"description\" content=\"Three former executives of Outcome Health, a Chicago-based health technology startup, were sentenced for their roles in a $1 billion fraud scheme\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cjnotebook.com\/?p=56893\" \/>\n<meta property=\"og:locale\" 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