Natalia Chi
The former CEO of the once-lauded Chicago tech startup Outcome Health did not commit fraud, but trusted the wrong person, his attorneys argued Wednesday morning.
After more than seven hours of closing arguments from government prosecutors, the defense team will hear closing arguments Wednesday in criminal trials against former Outcome CEO Rishi Shah, former President Shradha Agarwal, and former Chief Operating Officer and Chief Financial Officer Brad Purdy. It was started. The trial is now in its ninth week, and jurors are expected to begin deliberations within days after closing arguments are concluded.
Prosecutors allege that the three former rising stars spearheaded a $1 billion scam scheme and demanded cash from drug companies, lenders and investors.
Outcome was once one of Chicago’s most recognizable startups, with a reported valuation of over $5 billion at one point. The company sold ads to pharmaceutical companies, placed ads on TVs and tablets, and placed them in clinics and waiting rooms.
But federal prosecutors say the Shah, Agarwal and Purdi lied about the number of clinics with screens and tablets running content and used those false figures to overcharge pharmaceutical companies for advertising. , claims to have inflated the earnings figures used to raise funds by taking loans. Investor.
Shah, Agarwal and Purdy have been charged with mail fraud, wire fraud and bank fraud. The Shah has also been accused of money laundering and Purdy has been accused of making false statements to financial institutions. All three have pleaded not guilty and some have been sentenced to up to 30 years in prison.
Throughout the trial, the defense claimed that the fraud mastermind was former Outcome executive Ashik Desai. Desai has already pleaded guilty to one count of wire fraud, and early in the trial, he testified for more than two weeks about his actions and those of the defendant.
The Shah’s defense attorney, John Huston, made that point Wednesday morning by giving multiple instances where Desai assured the Shah that everything was overboard.
“He is trying to trick Shah into thinking there is no fraud,” Houston said. He testified to a jury that Desai forged screenshots of screens running advertisements for customers early in the trial, and forged return on investment reports and certain metrics without direction from above. reminded me of what I did.
“You can’t plan to cheat someone if they’re hiding the scam from you,” said Hueston. “How exactly does that work? The answer is, it doesn’t work.”
Hueston told jurors that Desai regularly lied, including about Shah’s involvement in certain situations and decisions in Outcome. Desai previously testified that he occasionally wrote Shah’s name in emails to other of his Outcome employees. That meant he wrote that he and Shah had agreed on a strategy or had taken action, although he had never actually consulted Shah, Hueston said.
“He used his name when Mr. Shah’s consent was not obtained,” Houston said.
Hueston’s allegations appear to indicate that prosecutors spent most of Tuesday to realize Shah wasn’t seeing as many ads on screens as promised to drug clients. The prosecution also found a list of offices where ads could be placed, including offices without screens, exchanged between Shah and Agarwal before Desai arrived at the firm. to pharmaceutical companies. Prosecutors argued that the emails indicated the fraud predates Desai, who committed the fraud at the direction of his superiors.
But Houston on Wednesday gave an example Shah indicated that clients should be informed that some offices included in the list of places where ads can be played are based on projections or averages.
Hueston also focused on early testimony in the trial of Jason Ketchum, former Senior Director of Promotional Strategy for Outcome. He testified that Ketchum, who started working for Outcome many years before Desai, did not teach Desai how to defraud, and that in his time a list of offices with screens was partially based on forecasts. Ketchum was granted immunity for his testimony.
“Did Mr. Shah make a mistake? He certainly did. Misjudgment? Yes. …But these aren’t the questions you’re here to answer,” Houston told the jury. The question you are here to answer is, did Mr. Shah start with Mr. Ketchum early on and draw up a scheme of fraud and then hand it over to Mr. Desai? It’s a definite no.”
Closing arguments by counsel, including defendants Agarwal and Purdy, are expected to continue over the next few days.
As a company, Outcome has already faced a number of legal actions after a 2017 Wall Street Journal article uncovered allegations of fraud. In March 2021, Outcome will merge with PatientPoint to form a new company called PatientPoint Health Technologies.
