Sentenced to seven and a half years in prison for his involvement in a ₹8,300 crore ($1 billion) fraud conspiracy, Indian-American businessman Rishi Shah, the millionaire cofounder of Outcome Health, has US District Judge Thomas Durkin delivered the decision, therefore ending a major corporate fraud case involving well-known investors including Goldman Sachs, Alphabet Inc., and venture capital company Illinois Governor JB Pritzker.
Originally called Context Media Health, Outcome Health was started by Shah in 2006 with the goal of streamlining medical advertising by means of streaming health adverts in medical offices. He joined co-founder Shradha Agarwal, and the business expanded rapidly drawing big investors.
Outcome Health was, behind the scenes, involved in fraud, though. Shah, Agarwal, and CFO Brad Purdy fabricated statistics to fill the gap and sold more advertising inventory than could be supplied, therefore misrepresenting the company's financial situation and operations. Among other clients, this dishonesty includes misleading pharmaceutical behemoth Novo Nordisk A/S on the size and breadth of the network.
Following a Wall Street Journal investigation, the plan started to fall apart in 2017. Investors, including Goldman Sachs and Alphabet, sued Outcome Health claiming fraud in its $487.5 million offering earlier that year. In April 2023 Shah was found guilty after being charged on several counts of fraud and money laundering.
Shah expressed regret after sentencing, admitting his inability to control Outcome Health's growth and building a false corporate culture. "The culture I created permissioned people on our team to think it was okay to create false data in response to a client question," he said.
