Indian-Origin Former Start-Up Executives Convicted for $1 Billion Fraud

Former Outcome Health CEO Rishi Shah and co-founder Shradha Agarwal were found guilty of multiple counts of fraud.

South Asians
2 min read
Hindi Female

Two Indian-origin start-up executives from Chicago were convicted of running a $1 billion corporate fraud scheme in the United States on Tuesday, 11 April, which targeted the company’s investors, clients and lenders.

While a federal jury found co-founder and former CEO of health technology company Outcome Health, Rishi Shah (37), guilty on 19 of 22 counts, they found co-founder Shradha Agarwal (37) guilty on 15 of 17 counts and former COO Brad Purdy (33) guilty on 13 of 15 counts.

Outcome Health had placed iPads and televisions in doctor’s offices across the US and sold advertising space to their clients - mostly pharmaceutical firms. The lawsuit said that Shah, Agarwal and Purdy under-delivered on their advertising campaign promises but continued to bill their clients in full.

Agarwal was convicted of five counts of mail fraud, eight counts of wire fraud and two counts of bank fraud.

Meanwhile, Purdy was convicted of five counts of mail fraud, five counts of wire fraud, two counts of bank fraud, and one count of falsifying statements to a financial institution and Shah for five counts of mail fraud, ten counts of wire fraud and two counts of bank fraud and money laundering each.


While the defendants face a maximum penalty of 30 years in prison for every count of bank fraud and 20 years for each count of mail and wire fraud, Shah faces 10 years in prison for each count of money laundering.

According to the evidence presented over the 10-week trial, the scheme was initiated in 2011 and lasted until 2017, causing at least USD 45 million of overbilled advertising services.

The trio were also convicted of defrauding the company’s lenders and investors since their under-delivery to the advertising clients resulted in an overstatement of their revenue in 2015 and 2016.

They also used these inflated revenue figures to raise $110 million in debt financing in April 2016, $375 million in December 2016 and $487.5 million in equity financing in 2017.

A statement by Shah’s spokesperson said, “Today's verdict deeply saddens Mr Shah, and he will exhaust every avenue to overturn this result.”

Meanwhile, Purdy’s attorney Theodore Poulos said:

“We are profoundly disappointed with the jury's verdict in this complex and nuanced case, particularly given the plethora of evidence adduced at trial, which showed that certain critical information was intentionally withheld from Brad Purdy."

Previously, three former Outcome employees pleaded guilty to trial. While former chief growth officer Ashik Desai pleaded guilty to one count of wire fraud, former analysts Kathryn Choi and Oliver Han pleaded guilty to conspiracy to commit wire fraud.

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Topics:  Fraud   Indian Origin   Start Up 

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