An appellate court has upheld the fraud convictions of two former top executives of Outcome Health, a once-prominent tech company in Chicago. A three-judge panel from the 7th U.S. Circuit Court of Appeals affirmed the jury’s decision to convict the executives on numerous fraud charges.
After a 10-week trial in 2023, the jury found co-founder and former CEO Rishi Shah guilty of 19 counts, while co-founder and former President Shradha Agarwal was found guilty of 15 counts. Shah received a prison sentence of 7½ years in 2024, and Agarwal was sentenced to three years in a halfway house. Both have remained free pending their appeal.
Outcome Health gained prominence in Chicago’s tech scene by selling advertising to pharmaceutical companies. These ads were displayed on screens and tablets installed in doctors’ offices and waiting rooms. The company rapidly expanded from 16 employees in 2011 to over 500 in 2017, with a reported valuation exceeding $5 billion. The company secured nearly $1 billion in investments from noteworthy backers, including a fund co-founded by Gov. JB Pritzker and entities of Goldman Sachs and Google.
The company’s rapid growth ended after allegations surfaced of misleading pharmaceutical companies and inflating data, initiated by a former analyst who contacted the Wall Street Journal. During the 2023 trial, prosecutors charged that Shah, Agarwal, and another executive, Brad Purdy, provided false details about the number of doctors’ offices equipped with their screens and tablets. These inflated numbers enabled them to overcharge for advertising and boost revenue figures for loans and investor funding. Purdy was also convicted in the scheme but was not part of the recent appeal.
Shah and Agarwal argued on appeal that they were unable to secure their preferred legal counsel due to the improper freezing of their assets by the government. The government acknowledged that some frozen funds were unrelated to the fraud. Nonetheless, the appellate court determined that they had been sufficiently informed about the issue to challenge it before their trial.
“We are deeply disappointed by the court’s ruling, which imposes no consequence for the government’s admittedly illegal restraint of funds Mr. Shah needed to fund his defense,” said Shah’s attorney Richard Finneran.
The appellate court stated that the evidence demonstrated Shah and Agarwal knew Outcome Health could not fulfill its promises yet continued to secure contracts with false financial projections. The court commented that the underperformance persisted over years, supporting the intention to defraud.
Efforts to contact an attorney for Agarwal on Friday were unsuccessful.