U.S. Charges Former Outcome Health Executives With Fraud
26 November 2019 - 5:24AM
Dow Jones News
By Rolfe Winkler
Federal prosecutors filed criminal charges against former
executives of once-highflying startup Outcome Health, alleging they
defrauded pharmaceutical companies as well as investors including
Goldman Sachs Group Inc., Alphabet Inc. and an investment firm then
headed by Illinois governor J.B. Pritzker.
The indictments of the company's former chief executive, Rishi
Shah, as well as ex-president Shradha Agarwal and previous finance
chief Brad Purdy, conclude a two-year investigation by the Justice
Department. The case was sparked by a 2017 Wall Street Journal
report that the company had misled some customers with inflated
data and fake reports.
In the indictment unsealed Monday, the three executives were
each charged with multiple counts of mail and wire fraud and one
count of bank fraud. Mr. Shah, 33 years old, also faces two counts
of money laundering and Mr. Purdy, 30, one count of making a false
statement to a bank. Each faces potential prison time if
convicted.
The Securities and Exchange Commission on Monday also sued the
three former executives, alleging they committed civil securities
fraud.
The SEC's lawsuit seeks a court order demanding Mr. Shah and Ms.
Agarwal return any proceeds illegally raised from investors. It
also seeks civil fines against all four defendants. The lawsuit
additionally asks the court to bar Messrs. Shah and Purdy and Ms.
Agarwal from serving as an officer or director of a public
company.
A lawyer for Mr. Shah said his client denies the charges brought
by Justice Department and SEC and "looks forward to his day in
court and the opportunity to clear his name."
Ms. Agarwal's attorney said her client denies the allegations
made by the Justice Department and the SEC. "Shradha never
committed fraud and never participated in any conspiracy. To the
contrary, Shradha was committed to transparency and integrity at
Outcome Health. She will fight to protect her good name in
court."
The U.S. Attorney's Office in Chicago, as well as a lawyer for
Mr. Purdy, didn't immediately respond to a request for comment.
--Dave Michaels contributed to this article.
Write to Rolfe Winkler at rolfe.winkler@wsj.com
(END) Dow Jones Newswires
November 25, 2019 13:09 ET (18:09 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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