Former executives of Outcome Health, a once-celebrated Chicago tech company, are awaiting the verdict in a $1 billion fraud trial. Rishi Shah, former CEO of Outcome Health, along with former President Shradha Agarwal and former COO/CFO Brad Purdy, are facing charges of mail fraud, wire fraud, bank fraud, and money laundering. The jury began deliberations on Wednesday afternoon after 10 weeks of arguments and testimony.
The charges stem from allegations that the executives lied to investors, lenders, and clients about the company’s success, including the number of screens and tablets in doctors’ offices and waiting rooms that showed Outcome’s advertising content. Federal prosecutors claim that the executives used these false numbers to overcharge drug companies for advertising and inflate revenue figures used to raise money from investors and get loans.
The defense attorneys and prosecutors focused much of their arguments on Ashik Desai, a former executive who has already pleaded guilty to wire fraud. The defense argued that Desai was the mastermind behind the fraud and acted without the knowledge of the defendants. Desai testified that he concealed falsified screen shots and return-on-investment reports from Shah, Agarwal, and Purdy.
During the trial, prosecutors showed jurors communications between Purdy and Desai, including one in which Desai told him about “heavily inflated” metrics related to ads running on tablets, and another in which an analyst told him that certain tablet metrics were “not real.” Purdy’s attorney argued that he had no reason to think those communications were red flags about widespread fraud.
Prosecutors also showed the jury a series of messages between Shah and Agarwal discussing how to handle an executive and several employees who were raising concerns about Outcome’s business practices. In those communications, they discuss the possibility of firing those employees. The defense argued that Outcome leaders had genuine concerns about the executive’s fit with the company’s culture.
Outcome sold advertising to pharmaceutical companies, with the ads running on TVs and tablets that the company installed in doctors’ offices and waiting rooms. Outcome grew from a 16-employee operation in 2011 to a company with more than 500 employees and a reported valuation of more than $5 billion by 2017. Shah was named to the Forbes 400 ranking of richest Americans in 2017, with a net worth of $3.6 billion at the age of 31.
If found guilty, the former executives could face sentences of up to 30 years in prison. The jury must decide whether they committed fraud beyond a reasonable doubt and with the intent to defraud.