Three former executives of Outcome Health, a healthcare technology company, were sentenced today for their roles in a massive $1 billion fraud scheme. The scheme involved inflating advertising revenue and deceiving investors to secure massive loans and investments.
Rishi Shah, co-founder and former CEO, received the harshest sentence – seven and a half years in federal prison. Shradha Agarwal, co-founder and former president, was sentenced to three years in a halfway house followed by deportation. Brad Purdy, the former COO and CFO, will serve 27 months behind bars.
According to the Department of Justice (DOJ), Shah, Agarwal, and Purdy orchestrated a scheme from 2012 to 2017.
They misled pharmaceutical companies by selling them advertising space they didn’t possess. Additionally, they manipulated financial statements to show inflated revenue, which they used to secure loans and investments totaling nearly $1 billion.
The executives then enriched themselves with millions of dollars in dividends from the fraudulently obtained funds.
“Outcome’s former executives deceived their clients, their auditor, their lenders, and their investors for years,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Their sentences should serve as yet another reminder that ‘faking it until you make it’ is not an acceptable practice for any business, whether that company is a technology start-up or a well-established corporation. Lying about your revenue to obtain customers or financing is fraud, plain and simple. The Criminal Division is committing to holding companies and their executives accountable for their misconduct.”
Read: Naples Man Arrested On J6 Capitol Riot Charges
“The defendants’ vast scheme defrauded the clients, investors, and lenders who supported their business,” said Acting U.S. Attorney Morris Pasqual for the Northern District of Illinois. “Although they sought to hide the fraud by silencing whistleblowers and duping auditors, a jury rightly held the defendants accountable for their extensive fraud scheme. Our office will continue to work tirelessly with our law enforcement partners to deliver justice for the victims of complex fraud schemes.”
The convictions and sentencing mark the conclusion of a long legal battle. A federal jury found the three former executives guilty in April 2023 on multiple counts of fraud, money laundering, and bank fraud.
Three other former Outcome Health employees had previously pleaded guilty to their roles in the scheme.
The collapse of Outcome Health served as a stark reminder of the consequences of corporate fraud. The company was forced to pay a $70 million settlement to resolve the investigation and has since faced significant challenges regaining investor trust.
Help support the Tampa Free Press by making any small donation by clicking here.
Android Users, Click To Download The Tampa Free Press App And Never Miss A Story. Follow Us On Facebook and Twitter. Sign up for our free newsletter.