Indian-Origin Executives Of Chicago-Based Start-Up Convicted Of Running Corporate Fraud Scheme
All three, Shah, Agarwal and Purdy who are yet to be sentenced in the case face a maximum penalty of 30 years in prison for each count of bank fraud.
Three former leaders, including two Indian-origin executives of a Chicago-based start-up, Outcome Health were found guilty by a federal jury that convicted them in the $1 billion (Rs 8,200 crore ) corporate fraud scheme. After a 10-week federal trial, the Jurors found Outcome Health co-founder and former CEO Rishi Shah guilty on 19 of 22 counts, co-founder and former president Shradha Agarwal guilty on 15 of 17 counts and former chief operating officer Brad Purdy guilty on 13 of 15 counts, reported news agency Associated Press.
All three, Shah, Agarwal and Purdy who are yet to be sentenced in the case face a maximum penalty of 30 years in prison for each count of bank fraud and 20-year imprisonment for each count of wire fraud and mail fraud.
According to USA Today, the health technology startup installed tablets and digital screens in doctor's offices and sold advertising space on those screens to pharmaceutical companies. But the federal trial found that the executives of the technology startup sold advertising inventory they did not have, inflated metrics and underdelivered on advertising campaigns.
"Despite these under-deliveries, the company still invoiced its clients as if it had delivered in full," read a statement released on Tuesday by the Department of Justice.
The scheme targeting the company's clients allegedly lasted between 2011 and 2017, during which the company grew from 16 employees and was valued at more than $5 billion.
The three executives were also found guilty of defrauding Outcome’s lenders and investors by overstating company revenue in 2015 and 2016, USA Today reported. Outcome used the inflated revenue figures to raise $475 million through two rounds of debt financing in 2016 and $487.5 million in equity financing in 2017.
All three, Shah, Agarwal and Purdy were also charged with fraud in 2019 by the Securities and Exchange Commission.
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