Federal prosecutors charged the young former executive vice president of a health care information and advertising company, Outcome Health, with one count of wire fraud Thursday, according to court records.
The allegations against Ashik Desai, 26, appear in an eight-page charging document known as an information, which typically signals an intention by the defendant to plead guilty. The document alleges a fraud scheme that ultimately netted Outcome’s executives $487.5 million.
Desai has also been named in a three-count complaint from the U.S. Securities and Exchange Commission, also filed Thursday in Chicago, which credits the Wall Street Journal with exposing the fraud.
Michael Monico, Desai’s defense attorney, declined to comment.
Outcome placed TV screens, tablets and other displays full of educational content in doctors’ offices and sold advertising space to pharmaceutical companies, the records show. Desai joined Outcome, also known as ContextMedia, on a full-time basis in July 2013.
Desai and other executives allegedly lied to Outcome’s clients about the network of offices it could target for advertising and about how many screens the ads would appear on, and then it inflated the numbers indicating how often patients would engage with the screens, prosecutors allege.
When clients asked which offices their advertisements were appearing in, Desai and the other executives would allegedly sometimes lie and sometimes simply not answer, citing privacy concerns.
Desai and the other executives would also lie in monthly affidavits sent to clients claiming Outcome met its contractual obligations by running ads on a certain number of screens and in a certain number of offices, the feds alleged.
They also lied to an auditor who asked for proof that Outcome had delivered on its obligations to its clients in 2015 and 2016, according to the charges.
Outcome’s executives allegedly used the 2015 and 2016 financial statements, full of bogus revenue numbers, to then obtain the $487.5 million from investors between March and July 2017.
