Outcome Health CEO gets 7½ years for being ‘architect of a billion-dollar fraud’
A federal judge has sentenced former Outcome Health CEO Rishi Shah to 7½ years in prison for a massive fraud scheme that prosecutors say enabled a “jet-set lifestyle” featuring private aircraft, yachts and a tony Chicago home.
U.S. District Judge Thomas Durkin handed down the sentence Wednesday amid a multiday sentencing hearing for Shah and his co-defendants, former Outcome President Shradha Agarwal and former Chief Operating Officer Brad Purdy.
“Rishi Shah was the architect of a billion-dollar fraud,” prosecutors told the judge. “Brick by brick, lie upon lie, and rationalization after rationalization, Shah built a rotten foundation at Outcome.”
They asked for a sentence of 15 years and said, “Anything less would fail to promote respect for the rule of law.”
Shah’s attorney insisted that “[t]he vast majority of the corporate victims in this case have been largely or entirely repaid for any losses that resulted from the fraud at Outcome.”
Agarwal and Purdy are also expected to be sentenced this week.
Outcome Health targeted pharmaceutical companies, selling ads that would run on televisions and tablets that the company provided to doctors’ offices and waiting rooms. Prosecutors alleged that the executives lied about how many doctors’ offices the advertising would appear in, allowing them to overcharge advertisers and use inflated revenue figures to secure loans and investors.
The company grew from 16 employees in 2011 to more than 500 in 2017, when its value was estimated at more than $5 billion.
Defense attorneys for the three former executives argued that the blame should fall on another official who previously pleaded guilty to one count of wire fraud and testified against them. Prosecutors at trial last year showed the defendants’ communications with that person, Ashik Desai, arguing that it was proof that the three officials knew of problems within the company.
Desai is set to be sentenced in September.