A trial date has been set for Rishi Shah, Shradha Agarwal and other Outcome Health executives who are accused of running a scheme that allegedly defrauded investors out of hundreds of million of dollars.
The trial is set to take place on Feb. 22, 2022, according to the Chicago Tribune. Shah, the company's former CEO, and Agarwal, its former president, have both pleaded not guilty to the charges.
The two, along with former Outcome CFO Brad Purdy and executive VP Ashik Desai, were charged in federal court last November with a combined 26 counts of fraud. Prosecutors say that Outcome, which operates digital tablets in doctors' offices and waiting rooms that display health care content and advertising, allegedly over-billed companies for ads that were never delivered and falsified revenue figures in an effort to raise nearly a billion dollars in loans and equity investments.
Shah and Agarwal face up to 30 years in prison if convicted.
Desai pleaded guilty to the charges last year and is cooperating with the investigation.
Outcome Health, founded originally as Context Media, was at one point the darling of Chicago's tech community and became the city's most valuable tech startup when it raised $487 million in 2017 at a roughly $5 billion valuation. But the company was sued later that year by its investors for fraud after the Wall Street Journal reported that several Outcome employees misled advertisers on the effectiveness of the company’s ads.
Prosecutors allege that Shah, Agarwal, Purdy, Desai and other Outcome employees lied about the number of screens ads were running on, falsely inflated engagement metrics, inflated revenue numbers and used those inflated financial statements to obtain the $487 million equity investment, as well as a $110 million loan in April 2016 and a $375 million loan in December 2016.
The government said that of the $487 million equity investment, $225 million went directly to Shah and Agarwal. Among the investors who sued Outcome for fraud include Goldman Sachs, Alphabet and Chicago's Pritzker Group Venture Capital.
The charges seek to "hold Outcome Health’s most senior executives accountable for an alleged massive fraud,” Steven Peikin, co-director of the SEC’s Division of Enforcement, said in a statement last year. “We charge that these C-suite officers defrauded investors out of hundreds of millions — and the co-founders lined their own pockets— through blatant lies about the company’s financial and business performance.”
