- Thursday, July 04, 2024
The accused duo were identified as Rishi Shah, co-founder and former chief executive of Outcome Health, and Shradha Agarwal, also a co-founder and former president of the company. A third person was also sentenced.
By: Shubham Ghosh
TWO individuals of Indian origin, previously executives at a health technology startup in Chicago, US, have been sentenced on charges of being involved in a fraud scheme that allegedly targeted the company’s clients, lenders, and investors.
The US justice department said the charges are related to approximately $1 billion (£792 million) in funds fraudulently obtained.
The accused duo were identified as Rishi Shah, co-founder and former chief executive of Outcome Health, and Shradha Agarwal, also a co-founder and former president of the company.
Another person named Brad Purdy, Outcome’s former chief financial officer, was also held accused.
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Both Shah and Agarwal were sentenced last month. While the former was given seven years and six months in prison, the latter got three years in a halfway house. Purdy was also sentenced to two years and three months in prison.
As per court records and evidence from the trial, Outcome, which was founded in 2006 and known as Context Media until January 2017, placed television screens and tablets in doctors’ offices across the US and sold advertising space on the devices to clients, predominantly pharmaceutical companies.
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The trio allegedly sold advertising inventory that the company did not own, to Outcome’s clients. They then under-delivered on its advertising campaigns and the firm yet invoiced the clients as it the delivery was fully made.
An official statement related to the case indicated that Shah, Agarwal, and Purdy allegedly misled or instructed others to mislead in order to hide under-deliveries to clients. This was done to create an impression that the company was meeting the contractual obligations for advertising content. Additionally, Purdy and colleagues at Outcome allegedly inflated metrics that purported to demonstrate patients’ frequent engagement with the tablets put up at doctors’ offices.
The trial evidence said that the scheme targeting Outcome’s clients started in 2011 and lasted for about six years, resulting in overbilled advertising services worth at least $45 million (£36 million).
Shah, Agarwal, and Purdy also defrauded Outcome’s lenders and investors, the statement said.
A federal jury convicted Shah, Agarwal, and Purdy in April last year.
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, India Today reported.
Agarwal, on the other hand, was convicted of five counts of mail fraud, two counts of bank fraud and eight counts of wire fraud.
Three other former Outcome employees also pleaded guilty prior to trial, said the report.
