An appellate court has reaffirmed the fraud convictions of two former executives of Outcome Health, a once-prominent Chicago tech firm. The 7th U.S. Circuit Court of Appeals upheld a jury’s decision from over three years ago, convicting the executives on multiple fraud counts.
In a 10-week trial in 2023, the jury found co-founder and former CEO Rishi Shah and co-founder and former President Shradha Agarwal guilty. Shah received a 7½-year prison sentence in 2024, while Agarwal was sentenced to three years in a halfway house. Both remain free as their appeals unfold.
Outcome Health was once a leader in Chicago’s tech scene, selling ad space to pharmaceutical companies on devices installed in medical offices. The company expanded from 16 employees in 2011 to over 500 in 2017, with a valuation surpassing $5 billion. Outcome Health raised nearly $1 billion from high-profile investors, including a fund co-founded by Gov. JB Pritzker, along with branches of Goldman Sachs and Google.
The company’s growth collapsed when a former analyst informed the Wall Street Journal of alleged fraud. During the 2023 trial, prosecutors accused Shah, Agarwal, and another executive, Brad Purdy, of inflating the number of medical offices featuring Outcome’s devices and falsifying data to justify overcharging pharmaceutical companies for ads.
Shah and Agarwal argued they were unable to hire preferred legal representation due to the government’s pretrial asset freeze. Some of the frozen assets were revealed to be unrelated to the fraud. The appellate court found that the lower court correctly resolved the issue, stating Shah and Agarwal had sufficient information to challenge the asset freeze.
“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,” commented Shah’s attorney Richard Finneran.
The appellate court noted evidence showing Shah and Agarwal knowingly continued to mislead regarding Outcome’s capabilities. Despite repeated failures to deliver, they continued to solicit contracts using false data, indicating an intent to defraud.
Efforts to contact Agarwal’s attorney on Friday were unsuccessful.