The co-founder and former president of Outcome Health did not teach an underling to commit fraud and did not intend to deceive clients, an attorney said Thursday as closing arguments continued in the widely watched criminal fraud trial of three former Outcome executives.
Attorneys entered a third day of closing arguments Thursday, with a lawyer representing former co-founder and president Shradha Agarwal getting her turn to make a final impression on jurors. Agarwal, along with former Outcome CEO Rishi Shah and former Chief Operating Officer and Chief Financial Officer Brad Purdy, stand accused of leading a $1 billion fraud scheme.
The three have been on trial in Chicago for nine weeks. Closing arguments are expected to continue into early next week, and the jury will then begin deliberations.
Shah, Agarwal and Purdy face charges of mail fraud, wire fraud and bank fraud, some of which carry sentences of up to 30 years in prison. All have pleaded not guilty.
The three were once darlings of Chicago’s tech scene before a Wall Street Journal article in 2017 exposed alleged problems at Outcome.
Outcome installed TVs and tablets in doctors’ offices and waiting rooms, and then sold advertising for those screens to pharmaceutical companies. Federal prosecutors allege that Shah, Agarwal and Purdy lied about how many doctors’ offices had screens and tablets running their content and then used those false numbers to overcharge drug companies for advertising and inflate revenue figures used to get cash from lenders and investors.
During the case, defense attorneys have maintained that a fourth employee, Ashik Desai, was to blame for the fraud. Desai has already pleaded guilty to one count of wire fraud, and he testified earlier in the trial.
But government prosecutors have argued that the fraud started before Desai arrived, and that Desai was just following his bosses’ lead.
Agarwal’s attorney Kori Bell struck back at that accusation during her closing arguments Thursday.
She highlighted an email in which Agarwal told Desai and others not to share emails about certain data discussions with salespeople because “I’ve noticed their confidence level in our data change dramatically when presenting to clients if they believe it’s accurate vs made-up.” That email was sent about a week after Desai started at the company, and prosecutors have seized on it as evidence of her teaching him how to conceal data.
But Bell reminded jurors that Desai testified that the email was not a direction to make up data or lie to salespeople, and that the data they were discussing could have been genuinely confusing to salespeople. “That’s a bombshell because that was the whole premise of the fraud handoff,” Bell said.
Like other defense attorneys, Bell described Desai as the ultimate fraudster, lying to countless people, while reassuring his bosses that everything was aboveboard.
Counter to prosecutors’ allegations, Bell argued that company leaders did not try to fool clients or conceal from them that they often sold inventory based on the growth they thought they would achieve over time. Prosecutors allege that the defendants were well aware that Outcome was selling advertising on screens it did not have and charging pharmaceutical clients as if they did have them, without pharmaceutical clients’ knowledge.
Bell played a video clip from an interview of Shah and Agarwal, in which Agarwal told an audience how the company grew: “So a lot of that was really kind of to us going step by step, adding a few screens and then telling the advertisers, Hey, we have 50, we’re projected on 200. If you start Jan. 1 with us, it’s Nov. 15, we’ll be there.”
The fact that projections were used, when discussing screens used for client ads, “was well known and openly discussed with all three sales employees and clients,” Bell said of how business worked at Outcome.
Bell also told jurors that Agarwal and Desai only overlapped by a few weeks in sales after Desai arrived. From that point on, Agarwal didn’t have much to do with finances or sales at the company, instead focusing on content, hiring and other areas, she said.
She said merely being president of a company is “not proof of a crime.”
Bell’s closing arguments are expected to continue Monday.
