A US court has sentenced Rishi Shah, an Indian American businessman and a former billionaire, to seven-and-a-half years in prison for committing a $1 billion (Rs 8,300 crore) fraud scheme wherein several high-profile investors were targeted.
The two convicts were former executives and co-founders of Outcome, a Chicago-based health tech firm. Shah, 38, Outcome's former CEO, was sentenced to seven years and six months in prison while Agarwal, 38, the former president of the company, was sentenced to three years in a halfway house.
Another executive convicted in the fraud was Brad Purdy, chief financial officer, who was sentenced to two years and three months in prison. All three were convicted in April 2023.
Who are Rishi Shah and Shradha Agarwal?
Shah, the son of an Indian immigrant doctor, was raised in the Chicago suburb of Oak Brook. He completed his education from Harvard University and Northwestern University, where he met Agarwal.
Together, the duo founded Context Media in 2006. A decade later, they acquired AccentHealth and the new entity was renamed as Outcome Health. It provided health ads targeting patients at the offices of doctors across the US besides selling ad slots on their devices to pharma companies. Eventually, Shah became prominent in Democratic circles.
Decoding the fraud
The convicts sold advertising inventory that was not owned by the company to the clients, according to the court filings. They then under-delivered on the ad campaigns though the clients were invoiced for full delivery. This amounted to $45 million overbilled services between 2011 and 2017.
The fraud was exposed by Wall Street Journal in 2017, following which investors including Goldman Sachs, Google-parent Alphabet and Illinois Governor J.B. Pritzker's firm filed lawsuits against Outcome Health, Bloomberg reported.