Appellate Court Upholds Fraud Convictions of Outcome Health Executives

An appellate court has affirmed the fraud convictions of the former top executives at Outcome Health, a once-prominent tech firm in Chicago. The 7th U.S. Circuit Court of Appeals’ three-judge panel confirmed a jury’s decision from over three years ago, convicting the executives on multiple fraud counts.

Following a 10-week trial in 2023, Rishi Shah, co-founder and former CEO, and Shradha Agarwal, co-founder and former President, were found guilty of 19 and 15 counts of fraud, respectively. Shah received a 7½-year prison sentence in 2024, while Agarwal was sentenced to three years in a halfway house. Both remained free during their appeal process.

Outcome Health was once lauded in Chicago’s tech scene, marketing ads to pharmaceutical firms displayed on TVs and tablets in doctors’ offices and waiting areas. The company expanded from 16 employees in 2011 to over 500 in 2017, achieving a valuation exceeding $5 billion. Outcome secured nearly $1 billion from lenders and well-known investors, including JB Pritzker’s co-founded fund, and units of Goldman Sachs and Google.

However, the company’s rapid ascent halted after a former analyst raised allegations with the Wall Street Journal about Outcome misleading pharmaceutical companies and falsifying data. In the 2023 trial, prosecutors argued that Shah, Agarwal, and a third executive, Brad Purdy, provided inaccurate data on the number of doctors’ offices with their screens and tablets. This led them to overcharge drug companies and inflate revenue for loans and investor fundraising. Purdy also faced conviction but wasn’t part of this appeal.

Shah and Agarwal argued in their appeal that the government froze excessive assets, preventing them from hiring chosen lawyers. Court documents showed the government admitted some frozen funds were unrelated to the fraud. The appellate court acknowledged the complex pretrial asset freezing but found the lower court was right as Shah and Agarwal had information to challenge it pre-trial.

“We are deeply disappointed by the court’s ruling, which imposes no consequence for the government’s admittedly illegal restraint of funds Mr. Shah needed to fund his defense,” said Shah’s attorney, Richard Finneran. He added plans to seek further review, possibly from the Supreme Court, to uphold constitutional rights.

The appellate opinion highlighted evidence showing Shah and Agarwal were aware they couldn’t fulfill promises but continued securing contracts with inflated inventory figures and pursued financing with false financial data. The opinion notes this wasn’t an isolated incident, but years of unmet promises indicated intent to defraud.

Attempts to contact Agarwal’s attorney were not immediately successful on Friday afternoon.