An appellate court has reaffirmed the fraud convictions of two former top executives from Outcome Health, a Chicago-based tech company. The 7th U.S. Circuit Court of Appeals, comprising three judges, confirmed a jury’s verdict from over three years ago, which found the executives guilty on numerous fraud charges.
After a 10-week trial in 2023, the jury convicted co-founder and former CEO Rishi Shah on 19 counts and co-founder and former President Shradha Agarwal on 15 counts. Shah received a prison sentence of 7½ years in 2024, while Agarwal was sentenced to three years in a halfway house. Both had remained free during their appeal process.
Outcome Health, once a rising star in Chicago’s tech sector, specialized in advertising for pharmaceutical firms, displaying ads on screens and tablets in doctors’ offices and waiting areas. The company expanded from 16 employees in 2011 to over 500 by 2017, with a valuation of more than $5 billion. Outcome Health attracted close to $1 billion in funding from prominent investors, including a fund co-founded by Gov. JB Pritzker and divisions of Goldman Sachs and Google.
The company’s rapid growth halted when a former analyst informed the Wall Street Journal about allegations of the firm deceiving pharmaceutical companies and inflating data. Prosecutors in 2023 claimed Shah, Agarwal, and a third executive, Brad Purdy, misrepresented the number of doctors’ offices with their screens and tablets. They allegedly overcharged drug companies based on incorrect data and inflated revenue figures to secure loans and investor funds. Purdy was also convicted but did not partake in the recent appeal.
Shah and Agarwal contended in their appeal that they were unable to hire their chosen lawyers for the trial due to inappropriate freezing of assets by the government. The government later admitted that some assets were mistakenly frozen and were unrelated to fraud as per court records. Despite acknowledging the issues with asset freezing as “complicated and troubling,” the appellate court agreed with the lower court that Shah and Agarwal had adequate information to contest the matter before the original trial.
Shah’s attorney, Richard Finneran from Bryan Cave Leighton Paisner, expressed disappointment over the ruling and indicated that they might seek further review from the Supreme Court to protect Shah’s constitutional rights. The appellate court noted that evidence demonstrated Shah and Agarwal were aware that Outcome Health could not fulfill its commitments, yet continued to secure contracts using inflated data and sought financing with false information. The court emphasized that this was not an isolated incident, as the defendants repeatedly failed over years, which suggested intent to defraud.
Attempts to contact Agarwal’s attorney for comment were unsuccessful late Friday afternoon.
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