Three, Including Two Indian American Former Executives, Sentenced for $1B Corporate Fraud Scheme

HI INDIA NEWS DESK
Three former executives of Outcome Health, a Chicago-based health technology start-up, were sentenced for their roles in a $1 billion fraud scheme targeting the company’s clients, lenders, and investors.

Rishi Shah, 38, co-founder and former CEO, was sentenced to seven years and six months in prison. Shradha Agarwal, 38, co-founder and former president, received three years in a halfway house. Brad Purdy, 35, former COO and CFO, was sentenced to two years and three months in prison.

The scheme involved selling advertising inventory the company did not possess, under-delivering on campaigns, and then invoicing clients as if they had delivered in full. They also inflated metrics showing patient engagement with Outcome’s tablets. This led to a material overstatement of Outcome’s revenue, which they used to secure over $972 million in debt and equity financing, benefiting Shah and Agarwal personally.

Outcome Health’s fraud extended to deceiving their auditor and silencing whistleblowers. Shah, Agarwal, and Purdy were convicted in April 2023 of multiple counts of fraud and money laundering. Three other former employees pleaded guilty prior to trial. The FBI and FDIC-OIG investigated the case, with the U.S. Securities and Exchange Commission providing assistance.