A former senior analyst at Outcome Health will avoid prison time after a federal judge sentenced her Tuesday to three years of probation and 200 hours of community service for her role in what prosecutors described as a $1 billion fraud scheme at the once-successful Chicago company.
Katherine Choi is the fifth former Outcome employee or leader to be sentenced in recent months. Choi pleaded guilty in 2020 to a charge of conspiracy to commit wire fraud as part of a plea deal, and cooperated with the government's investigation of Outcome executives.
The US Probation Office and Choi had requested that she be sentenced to probation only.
Outcome sold ads to pharmaceutical companies, displaying those ads on TVs and tablets that Outcome installed in doctors' offices and waiting rooms. But Outcome executives lied about how many doctors' offices had monitors and tablets running their content, and then used those false numbers to overcharge drug companies for ads, prosecutors said. The executives also inflated revenue figures used to raise money from investors and secure loans, prosecutors alleged during the trial of the company's three former top executives last year.
At the end of that trial, the jury found these three executives guilty of fraud. This summer, former Outcome co-founder and CEO Rishi Shah was sentenced to 7 1/2 years in prison, former co-founder and president Shraddha Agarwal was sentenced to three years in a halfway house, and former COO and CFO Brad Purdy was sentenced to 27 years in prison. A month.
In September, a fourth former CEO, Ashik Desai, was sentenced to seven months in prison. Desai struck a plea deal with the government early on and testified against his bosses during the trial.
Desai was Choi's boss, and Choi fabricated inventory and production figures under Desai's supervision, the government wrote in a sentencing memorandum. The government noted in that memo that other Outcome employees resigned when they learned of the fraud, but Choi remained at her job and “agreed to her role in the scheme because she valued her work at Outcome and the career and financial opportunities it provided,” and “likely because of her trust and respect for others at the company.”
However, the government also said she had no contact with high-level participants in the fraud scheme and did not benefit financially beyond her salary.
“She is charged in this case because she worked hard to please her boss, carry out his directives, and follow practices and procedures that were in place at her employer, Outcome Health, long before her departure,” Choi's attorney wrote in a sentencing memorandum. hired. Over time, I realized that some of these guidelines and practices were fraudulent. She stands in court because she chose to believe the justifications offered by her boss and continue to do his bidding, rather than leave a job that seemed like an exciting opportunity for a young college graduate.
According to the memo, Choi has since “done everything right, and everything possible to make things right,” including cooperating with the government's investigation, accepting responsibility for her behavior, rebuilding her career and learning lessons from her mistakes.
A second former analyst, Oliver Hahn, who also previously pleaded guilty to a charge of conspiracy to commit wire fraud, is scheduled to be sentenced on Wednesday.
Originally Posted: October 29, 2024 at 3:19 PM CST
