Two Indian-origin execs convicted of $1 billion fraud in US

The glamour of Silicon Valley has come with its fair share of bad actors from all sectors. The latest in the soup is a Chicago-based health tech startup, Outcome Health, founded by Indian-origin Rishi Shah and Shradha Agarwal. 

The US Department of Justice found co-founders Rishi Shah and Shradha Agarwal guilty of a $1 billion corporate fraud. The conviction came after a 10-week-long trial which found former CEO Shah guilty on 19 0f 22 counts and former president Agarwal guilty on 15 of 17 counts. 

Outcome Health's former chief operating officer Brad Purdy was also convicted. The trio was found guilty of defrauding the company's clients, investors and lenders. Three other former employees of the company had already pled guilty to fraud charges including Ashik Desai. 

The curse of @Forbes X under X (this time 40 under 40) strikes again. Both, Rishi Shah and Shradha Agarwal of Outcome Health were convicted of fraud today.
Back in 2017, Forbes described their company as
"Founded in 2006, Outcome Health is building the world’s largest platform… pic.twitter.com/DEmk27Zk34

— Vikas Chowdhry (@english_august) April 11, 2023

How it happened:

Defrauding the clients: 

• The US Justice Department said that Outcome Health would install TV and tablet screens in doctors' offices around the country to sell advertising space on the devices to mostly pharma companies.
• However, Shah, Agarwal and Purdy sold non-existing advertising inventory to their clients and also under-delivered on their advertising campaigns, while billing them in full.
• The three conviction executives along with others also manipulated the metrics that showed how patients engaged with the advertisements. 
• According to reports, the fraud ran from 2011 to 2017 resulting in $45 million in overbilled advertising services. 

Defrauding lenders and investors: 

• Rishi Shah, Shradha Agarwal and Brad Purdy also inflated the company's revenue figures to raise $110 million in debt financing in April 2016, $375 million in debt financing in December 2016, and $487.5 million in equity financing in 2017.
• They also lied to investors about their ongoing under-delivery of ad campaigns for clients. 

Rishi Shah and Shradha Agarwal aren't the only Indian-origin executives to have made headlines for all the wrong reasons: Here are a few others:

Sunny Balwani

#Update: An appeals court has rejected former Theranos COO Sunny Balwani’s latest try to delay his prison sentence.

Theranos founder Elizabeth Holmes has filed her own motion to delay the start of her prison term, set to begin on April 27. pic.twitter.com/mD78u1geJL

— scott budman (@scottbudman) April 7, 2023

• Ramesh "Sunny" Balwani is so far the most infamous Indian-origin executive who has been convicted of fraud. He was a former executive of healthcare startup, Theranos, and the lover of its CEO Elizabeth Holmes. 
• The Theranos fraud shook the entire Silicon Valley when it was unearthed. Balwani is now on his way to start a 13-year-long prison sentence. 

Nishad Singh 

• Nishad Singh, who worked as a co-lead engineer at cryptocurrency trading platform FTX, has pleaded guilty to charges of fraud.
• Singh is also named the third close associate of former FTX CEO Sam Bankman-Fried.

The Gupta family

• The Gupta family business spanning real estate, media, mining, and more mostly concentrated in South Africa become synonymous with corruption. 
• Now, South Africa is seeking the extradition of Atul and Rajesh Gupta from the UAE. And several other countries have sanctioned them. 
• The brothers stand accused of fraud and money laundering in South Africa. They are also accused of manipulating South Africa's political system.