CHICAGO (CBS) — Former Outcome Health CEO Rishi Shah has been sentenced to 7 1/2 years in prison for orchestrating a massive fraud scheme that allowed him to live a lavish lifestyle, including private jets, yachts, and a luxury Chicago home. U.S. District Judge Thomas Durkin handed down the sentence on Wednesday during a multi-day hearing for Shah and his co-defendants, former Outcome CEO Shraddha Agrawal and former Chief Operating Officer Brad Purdy.
The Fraud Scheme
“Rishi Shah was the architect of a multibillion-dollar fraud,” prosecutors told the judge. “Brick by brick, lie by lie, justification by justification, Shah built a corrupt foundation at Outcome.” Prosecutors had called for a 15-year prison sentence, arguing, “Anything less will not advance respect for the rule of law.”
Shah’s attorney countered that “the vast majority of corporate victims in this case have been substantially or fully compensated for any losses resulting from Outcome’s fraud.”
Agrawal and Purdy are also expected to be sentenced this week.
How the Scheme Worked
Outcome Health targeted pharmaceutical companies by selling ads to be displayed on televisions and tablets supplied to doctors’ offices and waiting rooms. Prosecutors alleged that executives lied about the number of doctors’ offices where the ads would appear, enabling them to overcharge advertisers and present inflated revenue figures to secure loans and attract investors.
The company experienced rapid growth, expanding from 16 employees in 2011 to over 500 in 2017, and reaching a valuation of more than $5 billion.
Defense Arguments and Co-Defendants
Defense attorneys for Shah, Agrawal, and Purdy argued that the primary blame should fall on another official, Ashik Desai, who previously pleaded guilty to a single count of wire fraud and testified against them. Prosecutors at last year’s trial presented evidence showing the defendants’ communications with Desai, indicating their awareness of issues within the company.
Desai is scheduled to be sentenced in September.
Conclusion
The sentencing of Rishi Shah marks a significant moment in the fallout from Outcome Health’s fraudulent activities. As the sentencing hearings for Shraddha Agrawal and Brad Purdy continue, and with Ashik Desai’s sentencing on the horizon, the full extent of the legal consequences for those involved in the scheme is becoming clear.
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