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August 18, 2023 05:46 AM

Feds scoff at Outcome Health founders' attempt to flip fraud convictions

Crain's Chicago Business
JOHN PLETZ
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    Federal prosecutors tried to knock down the Hail Mary effort by Outcome Health executives’ post-trial filings to have their fraud convictions overturned.

    A jury found Rishi Shah, Shradha Agarwal and Brad Purdy guilty in April on more than a dozen counts of fraud each in connection with over-billing pharmaceutical companies to advertise on their network of TV and computer screens installed in doctors offices. The over-billing, estimated at $45 million in 2015 and 2016, allowed Outcome Health to raise nearly $1 billion in loans and venture capital — with about $260 million going to Shah and Agarwal.

    Related: Outcome Health founder still spends lavishly despite asset freeze, feds say

    Shah, Agarwal and Purdy — who face up to 30 years each when they’re sentenced in October and November — have asked U.S. District Judge Thomas Durkin to overturn their convictions or grant them new trials for lack of evidence and failing to prove the charges.

    Such motions, which are separate from traditional appeals, are long shots, as prosecutors noted, citing a 7th Circuit Court of Appeals opinion that reads: “Overturning a guilty verdict for lack of evidence is serious business; we are essentially asked to take the case out of the jury’s hands, something we will do only if the record contains no evidence, regardless of how it is weighed, from which the jury could find guilt beyond a reasonable doubt.”

    Prosecutors scoffed at the requests by Shah, Agarwal and Purdy to have their verdicts summarily dumped after trial and before sentencing. “Outcome was rotten at its core," the government wrote in response. "The big lie at Outcome was this: Outcome sold something it did not have, billed clients as if it delivered in full and concealed its fraud using various deceptive means.”

    Keep up with one the industry’s fastest growing sectors. Sign up for Digital Health Intelligence.

    Prosecutors did not address another issue raised by Shah and Agarwal in which they argue the charges should be dismissed or they should be granted a new trial because they couldn’t afford to hire their first choices of attorneys because the government improperly froze nearly $5 million more in assets before trial than it should have.

    This story first appeared in Crain's Chicago Business.

    More on Outcome Health
    Outcome Health execs want their fraud convictions overturned. Here's their argument.
    Outcome Health founder still spends lavishly despite asset freeze, feds say
    Feds seek to seize $55M from Outcome Health founder
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