Home Local ‘A fraud of staggering scope’: Closing arguments begin in fraud trial against Outcome Health founders

‘A fraud of staggering scope’: Closing arguments begin in fraud trial against Outcome Health founders

by staff

The founders of the once-lauded Chicago start-up Outcome Health lied to clients for years as part of “a fraud of staggering scope and ambition,” a government prosecutor alleged during closing arguments Tuesday in the federal trial of three former executives.

Prosecutors kicked off closing arguments Tuesday morning in the criminal trial against former Outcome CEO Rishi Shah, former President Shradha Agarwal and former Chief Operating Officer and Chief Financial Officer Brad Purdy, who are accused of perpetrating a $1 billion fraud scheme. The closing arguments come after more than eight weeks of testimony and more than five years after the once high-flying company began to unravel.


Outcome was once one of the most talked about tech companies in Chicago, at one point rising to a reported valuation of more than $5 billion. Outcome placed screens and tablets in doctors’ offices and waiting rooms that ran educational content and pharmaceutical ads. Federal prosecutors, however, allege that Shah, Agarwal and Purdy lied about how many doctors’ offices had screens and tablets running their content and then used those exaggerated numbers to overcharge drug companies for advertising and inflate revenue figures used to get loans and raise money from investors.

Shah, Agarwal and Purdy now face charges of mail fraud, wire fraud and bank fraud. All three have pleaded not guilty to the charges, some of which carry sentences of up to 30 years in prison. None of the defendants testified during the trial.


Government prosecutor William Johnston spent the first part of closing arguments Tuesday morning detailing how the trio allegedly hewed closely to a fraud plan that included inflating the numbers of offices where they told drugmakers their ads could play, underdelivering on those promises and then concealing their actions.

Johnston focused, in particular, on Outcome founders Shah and Agarwal’s alleged roles in the scheme, aiming to poke holes in one of the defense’s main arguments. Defense attorneys have argued that a fourth former employee, Ashik Desai, was responsible for the fraud, and kept information from Shah, Agarwal and Purdy.

Desai has already pleaded guilty to one count of wire fraud, and spent more than two weeks testifying earlier in the trial about his actions and those of the defendants.

Johnston, however, spent Tuesday morning describing how Shah and Agarwal were involved in email discussions in 2012 and 2013 about giving pharmaceutical companies lists of offices where their ads could run that included offices with no screens. Those discussions pre-dated Desai’s start at the company in late 2013, when he was 20 years old, Johnston argued.

“It was the defendants, not Ashik Desai who started this fraud,” Johnston said. In Desai, the defendants found a smart but impressionable worker who would follow their lead and take the fraud to new heights, Johnston alleged.

“It’s true, from 2014 onward, Desai was running the day-to-day of the fraud … He wore many hats and every single one was given to him by Shah and Agarwal,” Johnston said. “They empowered him to run the fraud.”

Johnston also took aim at Purdy, highlighting an email between Purdy and Desai in 2013, in which Desai tells Purdy he “heavily inflated” metrics related to ads running on tablets and asked Purdy to “let me know whether we should stay away from that.” Purdy responded, four days later, saying they should discuss it further the following week.

“If Desai were secretly committing fraud on his own, why would he loop in the COO and seek guidance?” Johnston asked the jury.


Johnston also showed the text of a conversation from 2015 between Purdy and a former analyst and whistleblower. During that conversation, Purdy asked the analyst for certain tablet metrics. The analyst then warned Purdy that, “They’re not real,” and asked, “Are you sure you’re comfortable sharing non-real stats?” Purdy told him to send them anyway, and said, “Well I’m comfortable re-using existing SS data for these purposes”.

Closing arguments are expected to last for another day or two, with defense attorneys taking their turns after government prosecutors. A jury will then deliberate. The jury has spent the last eight weeks listening to attorneys and witnesses and looking at communications between company leaders and employees.

The government must prove to the jury that the defendants committed fraud beyond a reasonable doubt, and that they did so with intent to defraud. The defense has argued that Desai alone was responsible for the fraud, corrupting those who worked beneath him and keeping information from the defendants. They’ve argued that jurors must consider the fact that Desai could get a reduced prison sentence for testifying in the trial of Shah, Agarwal and Purdy, as part of an agreement with the government.

Outcome and its leaders have faced a number of legal actions in recent years, following a 2017 Wall Street Journal article that exposed the alleged fraud at the company.

Outcome settled a lawsuit by investors in early 2018, after investors alleged the company misled advertisers and investors about the company’s performance. At that point, Shah and Agarwal stepped down from daily operations of the company, and, six months later, resigned from their board positions.

In 2019, Outcome, as a company, agreed to pay $70 million to pharmaceutical companies to resolve a federal fraud investigation. As part of the agreement, Outcome admitted that from 2012 to 2017, former executives and employees “perpetrated a scheme to defraud its clients — most of which were pharmaceutical companies — by selling advertising inventory that it did not have,” the Justice Department said in a news release.


In March 2021, Outcome combined with company PatientPoint to create a new firm called PatientPoint Health Technologies.

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