U.S. charges former Outcome Health executives in $1 billion fraud
Topics: U.S. OUTCOME HEALTH FRAUD
Former Chief Executive Rishi Shah, former President Shradha Agarwal, and two other former executives of the pharmaceutical advertising company were charged with fraud in a 26-count indictment in Chicago made public.
The U.S. Department of Justice announced the charges four weeks after Outcome agreed to pay $70 million and enter a non-prosecution agreement to end a related criminal probe.
Outcome streams pharmaceutical ads on televisions and computer tablets it installs in doctors’ offices.
Prosecutors said the defendants maintained a facade of “extraordinary revenue growth” through a scheme from 2011 to 2017 in which Outcome overstated its industry connections, billed clients for ads that never ran and inflated revenue.
They said this enabled Chicago-based Outcome to raise $487.5 million of equity financing and borrow $485 million, with investors that included affiliates of Goldman Sachs Group Inc, Google parent Alphabet Inc and Pritzker Group.
Outcome said in 2017 it was worth $5 billion, and Forbes magazine estimated Shah’s net worth at $3.6 billion.
Prosecutors charged Shah, 33, Agarwal, 34, and former Chief Financial Officer Brad Purdy, 30, with various counts of bank fraud, mail fraud and wire fraud. Ashik Desai, 26, a former executive vice president, was charged with one wire fraud count.
The U.S. Securities and Exchange Commission filed related civil charges against the four defendants. Two former Outcome analysts face separate criminal charges. ■