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In the United States, former top managers of the medical technology startup Outcome Health, founded in Chicago in 2006, were convicted of fraud, as a result of which investors and creditors lost about $1 billion. The convicts pulled off their complex fraudulent scheme in threes:
* Rishi Shah, 38, co-founder and former CEO of Outcome Health;
* Shradha Agarwal, 38, former president of the company;
* Brad Purdy, 35, former Chief Operating Officer and Chief Financial Officer of the company.
Outcome Health provided TVs and tablets for use in doctors ' waiting rooms and sold advertising on these devices, mainly to pharmaceutical companies. However , according to the US Department of Justice, in fact, the firm sold non-existent advertising spaces and repeatedly overestimated the indicators of patient interaction with content in clinics.
The fraudulent scheme, which operated from 2011 to 2017, resulted in overpayments for advertising services in the amount of at least $45 million. This artificially increased the company's revenues in 2015 and 2016, allowing Shah, Agarwal and Purdy to raise $110 million in debt financing in April 2016, $375 million in December 2016, and $487.5 million in equity financing in early 2017.
According to the US Department of Justice, the $110 million funding paid Shah $30 million in dividends and Agarwal $7.5 million. The $487.5 million equity financing resulted in a $225 million dividend, which Shah and Agarwal also received.
Chief Deputy Assistant Attorney General Nicole Argentieri said the sentences should serve as a reminder of the inadmissibility of cheating for the sake of success. "Fraud, as in the case of Outcome Health — is a crime that should be punished," she said.
A federal jury found the trio guilty in April 2023. And only recently the final verdict was passed to the scammers:
* Shah was convicted on five counts of mail fraud, ten counts of electronic communications fraud, two counts of bank fraud, and two counts of money laundering. He was sentenced to seven and a half years in prison.
* Agarwal was convicted on five counts of mail fraud, eight counts of electronic communications fraud, and two counts of bank fraud. She was sentenced to three years in a rehabilitation center.
* Purdy was convicted of five counts of mail fraud, five counts of electronic communications fraud, two counts of bank fraud, and one count of making false statements to a financial institution. The man received two years and three months in prison.
According to the FBI, investment fraud became the most lucrative category of cybercrime last year, causing more than $4.5 billion in damage.
• Source: https://www.justice.gov/opa/pr/three-former-executives-sentenced-1b-corporate-fraud-scheme
• Source: https://www.ic3.gov/Media/PDF/AnnualReport/2023_IC3Report.pdf
* Rishi Shah, 38, co-founder and former CEO of Outcome Health;
* Shradha Agarwal, 38, former president of the company;
* Brad Purdy, 35, former Chief Operating Officer and Chief Financial Officer of the company.
Outcome Health provided TVs and tablets for use in doctors ' waiting rooms and sold advertising on these devices, mainly to pharmaceutical companies. However , according to the US Department of Justice, in fact, the firm sold non-existent advertising spaces and repeatedly overestimated the indicators of patient interaction with content in clinics.
The fraudulent scheme, which operated from 2011 to 2017, resulted in overpayments for advertising services in the amount of at least $45 million. This artificially increased the company's revenues in 2015 and 2016, allowing Shah, Agarwal and Purdy to raise $110 million in debt financing in April 2016, $375 million in December 2016, and $487.5 million in equity financing in early 2017.
According to the US Department of Justice, the $110 million funding paid Shah $30 million in dividends and Agarwal $7.5 million. The $487.5 million equity financing resulted in a $225 million dividend, which Shah and Agarwal also received.
Chief Deputy Assistant Attorney General Nicole Argentieri said the sentences should serve as a reminder of the inadmissibility of cheating for the sake of success. "Fraud, as in the case of Outcome Health — is a crime that should be punished," she said.
A federal jury found the trio guilty in April 2023. And only recently the final verdict was passed to the scammers:
* Shah was convicted on five counts of mail fraud, ten counts of electronic communications fraud, two counts of bank fraud, and two counts of money laundering. He was sentenced to seven and a half years in prison.
* Agarwal was convicted on five counts of mail fraud, eight counts of electronic communications fraud, and two counts of bank fraud. She was sentenced to three years in a rehabilitation center.
* Purdy was convicted of five counts of mail fraud, five counts of electronic communications fraud, two counts of bank fraud, and one count of making false statements to a financial institution. The man received two years and three months in prison.
According to the FBI, investment fraud became the most lucrative category of cybercrime last year, causing more than $4.5 billion in damage.
• Source: https://www.justice.gov/opa/pr/three-former-executives-sentenced-1b-corporate-fraud-scheme
• Source: https://www.ic3.gov/Media/PDF/AnnualReport/2023_IC3Report.pdf
