Chicago: Two Indian-origin executives of a Chicago-based start-up face prison terms after being convicted by a federal jury in the US.
PTI reported that the duo has been found guilty of running a $1 billion corporate fraud scheme which targeted the company’s clients, lenders and investors.
The trial went on for 10 weeks at the end of which jurors pronounced health technology company Outcome Health’s co-founder and ex-CEO Rishi Shah guilty on 19 of 22 counts, co-founder and ex-president Shradha Agarwal guilty on 15 of 17 counts and ex-CEO Brad Purdy guilty on 13 of 15 counts.
The 37-year-old Shah was convicted of 5 counts of mail fraud, 10 counts of wire fraud, 2 counts of bank fraud and 2 counts of money laundering.
Agarwal, also 37, was convicted of 5 counts of mail fraud, 8 counts of wire fraud and 2 counts of bank fraud. Purdy, 33, was convicted of 5 counts of mail fraud, 5 counts of wire fraud, 2 counts of bank fraud and 1 count of false statements to a financial institution.
They face a maximum penalty of 30 years in prison for each count of bank fraud and 20-year imprisonment for each count of wire fraud and mail fraud.
Shah faces a maximum penalty of 10 years in prison for each count of money laundering.
The court will schedule a sentencing hearing shortly.
As per evidence presented to the court, the trio sold advertising inventory the company did not have to Outcome’s clients and under-delivered on its advertising campaigns.
Despite the under-deliveries, the company invoiced its clients as if it had delivered in full.
Shah, Agarwal and Purdy lied or influenced others to lie about concealing the under-deliveries from clients and make it appear as if the company was delivering advertising content to the number of screens in the clients’ contracts.
According to evidence presented during trial, the scheme targeting company’s clients began in 2011 and lasted until 2017, resulting in at least $45 million of overbilled advertising services.
Shah, Agarwal and Purdy were also convicted of defrauding the company’s lenders and investors.
A spokesperson for Shah said the verdict has “deeply saddened” him, and he will take recourse to every avenue to overturn “this result”.
Purdy’s attorney for Purdy said in a statement: “We are profoundly disappointed with the jury’s verdict in this complex and nuanced case, particularly given the plethora of evidence adduced at trial, which showed that certain critical information was intentionally withheld from Brad Purdy.”
