Judge Orders Return of $5 Million Assets to Indian American Entrepreneur Seized Following His Conviction in Tax Fraud Scheme

Rishi Shah, the 37-year-old co-founder and former CEO of Outcome Health, was convicted in April for his role in a $1 billion scheme that targeted the company's clients, lenders, and investors.

Indian American entrepreneur Rishi Shah will get back nearly $5 million in assets seized from him by the Department of Justice when he was convicted in a $1 billion tax fraud scheme, Crain’s Chicago Business reported. The judge ruled that even though the 37-year-old co-founder and former CEO of Outcome Health was convicted in April for his role in the scheme that targeted the company’s clients, lenders, and investors, “the $4.9 million in investments should not have been frozen because they were made before the crimes occurred,” the Crain’s report said.

At the time of his conviction, “prosecutors froze about $55 million in total assets, owned by Shah Agarwal [Co-founder and former president Shradha Agarwal],” Crain’s said. While Shah’s attorney’s say their client wants to use the money for legal fees, the government argued that the amount could come in handy to pay the restitution that it is expected to seek, the Crain’s report added.

Shah was convicted of “five counts of mail fraud, 10 counts of wire fraud, two counts of bank fraud, and two counts of money laundering,” the DoJ said. Apart from Shah, the April 11 arrest also included Agarwal, 37, and Brad Purdy, 33, the former chief operating officer and chief financial officer, the DOJ said.

Shah’s company “installed television screens and tablets in doctors’ offices around the United States and then sold advertising space on those devices to clients, most of whom were pharmaceutical companies.”

In an April 11 press release, the DOJ said Shah’s company “installed television screens and tablets in doctors’ offices around the United States and then sold advertising space on those devices to clients, most of whom were pharmaceutical companies.” Despite these under-deliveries, the company still invoiced its clients as if it had delivered in full.

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According to the DOJ, Shah, Agarwal, and Purdy “lied or caused others to lie to conceal the under-deliveries from client.” They also “also inflated metrics that purported to show how frequently patients engaged with Outcome’s tablets installed in doctors’ offices.” Citing trial evidence, the DOJ said that the fraud scheme that began in 2011, lasted until 2017, “and resulted in at least $45 million of over billed advertising services.”

The trio was also convicted of defrauding the company’s lenders and investors and using the inflated revenue figures in Outcome’s 2015 and 2016 audited financial statements.” They raised “$110 million in debt financing in April 2016, $375 million in debt financing in December 2016, and $487.5 million in equity financing in early 2017,” the DoJ said.