Two Indian-origin executives of a Chicago-based start-up have been convicted by a federal jury in US of running a $1 billion corporate fraud scheme that targeted the company’s clients, lenders and investors.
Following a 10-week-long trial, jurors found health technology company 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.
A statement issued by the Justice Department said on Tuesday that the company installed television screens and tablets in doctors’ offices around the US and then sold advertising space on those devices to clients, most of whom were pharmaceutical companies.
According to evidence presented at the trial, Shah, Agarwal, and Purdy sold advertising inventory the company did not have to Outcome’s clients, then under-delivered on its advertising campaigns.
Despite these under-deliveries, the company still invoiced its clients as if it had delivered in full.
Shah, Agarwal, and Purdy lied or caused others to lie to conceal the under-deliveries from clients and make it appear as if the company was delivering advertising content to the number of screens in the clients’ contracts.