Who is Rishi Shah, the Indian-American sentenced to 7.5 years in prison for a billion-dollar fraud? | Who Is News

“Their sentences should remind us once again that faking it until you make it is not acceptable business practice, whether a tech startup or an established corporation. Lying about revenue to gain customers or funding is fraud, pure and simple. The Criminal Division is committed to holding companies and their leaders accountable for their misconduct,” Argentieri said.

Who is Rishi Shah?

Rishi Shah is the founder of Outcome Health, a Chicago-based health-tech startup that broadcasts infomercials on TVs in doctors' offices across the United States and also sells advertising space on their devices to clients, primarily pharmaceutical companies.

A 2017 Forbes article on Shah said he grew up in Oak Brook, a Chicago suburb. He is the son of a doctor who emigrated from India, the report added.

According to his LinkedIn profile, Shah is also the chairman and CEO of JumpStart Ventures. He attended Harvard and Northwestern Universities. It was at Northwestern that he met Shradha Agarwal, the chairman and co-founder of Outcome Health, according to the Forbes report. Together, they started a company called “ContextMedia” in 2006, which later became Outcome Health in 2016 after reportedly purchasing AccentHealth.

What was the case against Rishi Shah?

According to a Bloomberg report, prosecutors were seeking a 15-year prison sentence for Shah, accusing him of being “the driving force behind a dizzying series of lies to clients, lenders, investors and an auditing firm.”

The U.S. Justice Department described the fraud by saying that Shah sold “advertising inventory that the company did not have available to Outcome's customers and then underpriced its advertising campaigns. Despite these underdeliveries, the company still billed its customers as if it had delivered the full amount of product.”

In addition to Shah, Agarwal and former COO and CFO Brad Purdy were also convicted for their roles in the fraud scheme.

According to the Justice Department, the three former company executives “lied or caused others to lie to conceal underdeliveries to customers and to make it appear that the company was delivering advertising content to the number of screens specified in customer contracts.”

“According to the evidence at trial, the scheme targeting Outcome's clients began in 2011 and lasted through 2017, and resulted in at least $45 million in overcharged advertising services,” the department said in its statement.

The fraudulent operation involved investors including Goldman Sachs Group Inc., Google parent company Alphabet Inc. and Illinois Gov. J.B. Pritzker's venture capital firm, according to the Bloomberg report.

The case was investigated by the Federal Bureau of Investigation (FBI) and the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG). The U.S. Securities and Exchange Commission provided assistance in the case.