Indian-origin American billionaire Rishi Shah, 38, and his close associates, Shraddha Aggarwal, 38, and Brad Purdy, 35, have been accused of Rs. 8,300 crores fraud i.e. about one billion dollars. All three were former executives of Outcome Health, a Chicago- based health technology start-up company.
Rishi was found to have defrauded high-profile investors such as Goldman Sachs Group, Google’s parent company Alphabet and Illinois Governor JB Pritzker’s venture capital firm.
According to a press release published by the Office of Public Affairs, Rishi Shah has been sentenced to seven and a half years in prison by the US court, Shraddha Agarwal received a sentence of three years in a halfway house, and Brad Purdy was sentenced to two years and three months in prison.
It is alleged that Rishi Shah’s company also defrauded Goldman Sachs, Google’s parent company Alphabet and Illinois Governor JB Patrick’s company to earn huge profits. US District Judge Thomas Durkin found him guilty of corporate fraud.
Outcome Health was Shah’s brainchild during his university days. Shah started working on Outcome Health while studying at university. This company was formed in 2006. The job of this company was to install TVs in doctors’ offices on which advertisements related to the medical field were shown.
Shraddha Aggarwal was Shah’s partner in the work. The company made huge profits in a few years. However, questions were raised about contact between advertisers and patients. Outcome Health was found to have lied to several large companies in this matter. The standard in which TVs were installed in doctors’ offices was not correct. The screen size was very small in many places.
Within four years, Outcome Health had become a major company in terms of healthcare and tech investment. The company promised to deliver medical products through modern technology. After this many big companies also invested. The court was told that Shah along with Shraddha Aggarwal and others defrauded investors, customers and lenders. The company showed higher sales of advertising materials. The company could not even deliver this much material. After this, data was also manipulated and investors were lied to.
After the data tampering was revealed, the results of the Outcome Health company started coming out. At the same time, the Shah’s large profits also attracted public attention. Shah bought his own private jet and ship. He bought a bungalow worth 1 million dollars. In 2016, Rishi Shah’s total wealth increased to 4 billion dollars. In 2017, a Wall Street Journal report revealed Rishi Shah’s success story.
However, after Rishi Shah’s report in the newspaper, investors including Goldman Sachs, Alphabet and other companies filed a case against Outcome Health. After this, the company returned a dividend of around $225 million. But then slowly the name of the company started getting bad and due to bad investors the company collapsed.
Several cases of money laundering have also been registered against Shah. Shah’s company has admitted to using fake data and lying.
How Rishi Shah and Shraddha Agarwal Built Outcome Health?
Rishi Shah was up in the Chicago neighborhood of Oak Brook, the son of an immigrant physician from India. After completing his studies at Harvard and Northwestern, he got to know Agarwal.
In 2006, the two cofounded Context Media. Ten years later, they bought AccentHealth, and the merged company was called Outcome Health. It offered pharmaceutical businesses ad spots on their devices in addition to providing health advertisements directed at patients in physician offices around the United States. Shah eventually rose to prominence in Democratic circles.
