2 Indian-American execs convicted in $1 bn corporate fraud scheme
Darpan News Desk IANS, 12 Apr, 2023 05:18 PM
New York, April 12 (IANS) Two Indian-American executives of a Chicago-based health technology startup have been convicted for their roles in a $1 billion fraud scheme that targeted the company's clients, lenders, and investors.
Rishi Shah, 37, co-founder and former CEO, Shradha Agarwal, 37, former president, and Brad Purdy, 33, former chief operating officer, were convicted of defrauding Outcome Health's lenders and investors.
Shah was convicted of five counts of mail fraud, 10 counts of wire fraud, two counts of bank fraud, and two counts of money laundering, a Department of Justice release said.
While Agarwal was convicted of five counts of mail fraud, eight counts of wire fraud, and two counts of bank fraud, Purdy was convicted on five counts of mail fraud, five counts of wire fraud, two counts of bank fraud, and one count of false statements to a financial institution.
The defendants face a maximum penalty of 30 years in prison for each count of bank fraud and 20 years in prison for each count of wire fraud and mail fraud.
Purdy faces a maximum penalty of 30 years in prison for the count of false statements to a financial institution. Shah faces a maximum penalty of 10 years in prison for each count of money laundering.
According to the Department of Justice release, Outcome installed television screens and tablets in doctors' offices around the US and then sold advertising space on those devices to clients, most of whom were pharmaceutical companies.
According to evidence presented at trial, Shah, Agarwal and Purdy sold advertising inventory the company did not have to Outcome's clients, then under-delivered on its advertising campaigns.
Despite these under-deliveries, the company still invoiced its clients as if it had delivered in full.
The trio lied or caused others to lie to conceal the under-deliveries from clients and make it appear as if the company was delivering advertising content to the number of screens in the clients' contracts.
Purdy and others at Outcome also inflated metrics that purported to show how frequently patients engaged with the company's tablets installed in doctors' offices.
According to the trial evidence, the scheme targeting Outcome's clients began in 2011, lasted until 2017, and resulted in at least $45 million of overbilled advertising services.
The under-delivery to Outcome's advertising clients resulted in a material overstatement of Outcome's revenue for the years 2015 and 2016.
The company's outside auditor signed off on the 2015 and 2016 revenue numbers because Purdy caused others to fabricate data to conceal the under-deliveries from the auditor.
The trio then used the inflated revenue figures in Outcome's 2015 and 2016 audited financial statements to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016, and $487.5 million in equity financing in early 2017.
They lied to investors and lenders to conceal their ongoing under-delivery of advertising campaigns for clients.
Shah and Purdy also misrepresented to investors the efficacy of Outcome's advertising campaigns by concealing the fact that it had failed to meet return-on-investment commitments to clients.
The $110 million debt financing resulted in a $30.2 million dividend to Shah and a $7.5 million dividend to Agarwal; the $487.5 million in equity financing resulted in a $225 million dividend to Shah and Agarwal.
Three other former employees of Outcome pleaded guilty prior to trial.
Ashik Desai, the former chief growth officer, pleaded guilty to one count of wire fraud; and Kathryn Choi, a former senior analyst, and Oliver Han, a former analyst, both pleaded guilty to conspiracy to commit wire fraud.
Desai, Choi, and Han will be sentenced at a later date.
These supplemental visas are available only to the US businesses that are suffering irreparable harm or will suffer impending irreparable harm without the ability to employ all the H-2B workers requested in their petition, as attested by the employer on a new attestation form.
Ahead of the IMF publishing revised economic forecasts next week, Georgieva said global growth in 2022 had collapsed by almost half since the initial rebound from the Covid pandemic in 2021, sliding from 6.1 per cent to 3.4 per cent.
Trump's trusted allies and donors in the Republican Party and business tycoons have shied away and his 'best friend' media baron Rupert Murdoch, owner of Fox News and The Wall Street Journal, has dumped him in favour of Florida Governor Ron DeSantis, who is yet to announce his nomination.
His intent was obvious — to show that in the arena of the American attention economy, where the fighting forever rages, Donald J. Trump remains a potent force. Commanding attention has been his world, and politics is a realm of attention. Whether the legal realm, which he has successfully avoided until now, will be anywhere near the same for him may be another reality entirely.
In total, Trump is facing 34 counts of falsifying business records, all of them allegedly "with intent to defraud and intent to commit another crime and aid and conceal the commission thereof," the now-unsealed indictment reads.
Trump became the first former President to be arrested and face a trial in the nation's 246-year history, plunging the US into unchartered legal and political territory. He is also a candidate for next year's presidential election, the leading candidate for the Republican nomination, and only two per cent behind President Joe Biden in polls.
