Jury begins deliberations in Outcome Health $1 billion fraud trial

CHICAGO — A jury is now deciding the fates of three former Chicago tech scene stars accused of perpetrating a $1 billion fraud scheme by lying to investors, lenders and clients.

The jury began deliberations Wednesday afternoon after nearly 10 weeks of arguments and testimony in the criminal trial against former Outcome Health CEO Rishi Shah, former Outcome President Shradha Agarwal and former Outcome Chief Operating Officer and Chief Financial Officer Brad Purdy.

The jury is tasked with deciding whether to find the three guilty on charges of mail fraud, wire fraud and bank fraud. Shah also stands accused of money laundering, and Purdy of making false statements to a financial institution.

Some of the charges carry sentences of up to 30 years in prison. All three have pleaded not guilty to the charges against them.

The three once led a company that was celebrated as a local tech success story. Outcome sold advertising to pharmaceutical companies, with the ads running on TVs and tablets that Outcome 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, who owned 80% of Outcome, 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. Agarwal owned 20% of the company.

Federal prosecutors, however, allege that Outcome’s success was built on lies. Prosecutors allege that Shah, Agarwal and Purdy lied about how many doctors’ offices had screens and tablets running their content and then used those false numbers to overcharge drug companies for advertising, and inflate revenue figures used to get loans and raise money from investors.

Throughout the trial, defense attorneys and prosecutors focused much of their firepower on a fourth former executive, Ashik Desai. The defense argued that Desai was the mastermind behind the fraud, and left his bosses in the dark about his misdeeds.

Desai has already pleaded guilty to one count of wire fraud. Desai testified earlier in the trial that he concealed from Shah, Agarwal and Purdy falsified screen shots and return-on-investment reports.

“The real story from this trial is that Outcome was making it until Desai arrived and began faking it,” said John Hueston, an attorney for Shah, during closing arguments. “The company was making it until the revelation of Mr. Desai’s fraud unraveled it all.”

…continued

swipe to next page