CHICAGO _ Former Outcome Health executives Rishi Shah and Shradha Agarwal, once superstars in Chicago's tech scene, pleaded not guilty Monday to charges relating to their alleged roles in a $1 billion fraud scheme at the company.
Shah and Agarwal, along with two other former executives, face a combined 26 counts of fraud. The most serious charges carry up to 30 years in prison if convicted.
Outcome installs screens in doctor's offices and waiting rooms that combine health information with drug advertising. Shah is the co-founder and former CEO. Agarwal is the former president.
The company was founded in 2006 as ContextMedia, when Shah and Agarwal were students at Northwestern University. Pharmaceutical companies pay Outcome Health to run the ads and other content on the screens.
Long a star in Chicago's tech industry, Outcome gained widespread attention in 2017 when it secured funding from big-name investors and rose to a valuation of about $5.5 billion, a number unmatched among local tech companies.
The charges allege the former executives ran a massive fraud scheme that brought in $487.5 million in financing, a $110 million loan and a $375 million loan, amounting to nearly $1 billion. The indictment also alleges the executives lied to clients and billed them millions of dollars for ads that never ran.
Shah, now 33, and Agarwal, now 34, were the last of the charged former executives to appear in federal court. Brad Purdy and Ashik Desai appeared in federal court separately last week, surrendered their passports and were released on condition of bond.
Purdy, now 30, held various roles including chief financial officer and chief operating officer until he left Outcome in early 2018. He pleaded not guilty to six counts each of mail fraud and wire fraud, two counts of bank fraud and one count of making false statements to a financial institution.
Ashik Desai, now 26, pleaded guilty to his alleged role in the scheme. A federal prosecutor said in court last week that Desai is cooperating with the government's investigation.
Desai served as Outcome's executive vice president of business growth and analytics. He was charged with felony wire fraud last month.
Two employees who worked under Desai, Kathryn Choi and Oliver Han, were charged last month with felony conspiracy to commit wire fraud in a criminal information.
Choi, 29, and Han, 29, pleaded not guilty earlier this month in federal court in Chicago, and were released on condition of bond. The maximum term of imprisonment for the charge is five years if convicted.
amarotti@chicagotribune.com
Twitter @AllyMarotti
