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.
The bodies of eight-month-old Aroohi Dheri, her parents Jasleen Kaur, 27, and Jasdeep Singh, 36, and her uncle Amandeep Singh, 39 were found in an "extremely remote" area near the intersection of Indiana and Hutchins roads. Jesus Salgado is said to have had a long-standing feud with the family and was a former employee in their trucking business.
Indian-origin people across the US have often been targets of robbers because they are believed to have lots of jewellery. The four, who had been under surveillance, were caught in another suburb, New Hyde Park, where they had targeted a house after following a woman, police said.
Claudio Campos, 28, attacked Avtar Singh in broad daylight as he was walking home from work through the Tib Street area of the City Centre on June 23. Campos, who was with his partner at the time, proceeded to walk up behind Avtar before violently punching him to the head. Singh fell into the middle of the road where he stayed unconscious until a passer-by called for an ambulance.
Quoting hate crime statistics 2021-22, Gill, an MP from Birmingham, said hate crimes against Sikhs rose by 169 per cent in comparison to a 38 per cent increase in reported religious hate crimes overall. The 2001 census recorded 336,000 Sikhs living in Britain. Gill said 301 hate crimes against Sikhs were reported in 2021-22, up from 112 in 2020-2021.
Jatinder Singh, 37, and his partner, Thevamanogari Manivel, 40, appeared by video link from prison in Melbourne Magistrates Court on Tuesday, where they were committed to stand trial over theft and other charges, the Canberra Times reported. Crypto.com intended to refund Manivel $100 but she was erroneously transferred $10,474,143.
The walls of India K' Raja restaurant, owned and operated by Tony Sappal, were spray-painted with derogatory words and phrases targeting Asian Americans. "For 27 years, this has been home. Nobody has ever displayed that kind of anger or hate to us," Sappal told the Richmond Times Dispatch.
