February 14, 2023 06:40 AM<\/span>
\n<\/span>\n<\/p>\n<\/div>\n

\n \n $\"Screen$ \n<\/picture>\n<\/a>
\n<\/span>\n<\/p>\n

Shradha Agarwal, left, and Rishi Shah<\/p>\n<\/div>\n<\/div>\n

The investigation that led to the downfall of Outcome Health started with a single email after the company made headlines with a blockbuster deal that valued it at more than $5 billion.<\/p>\n

The company, which was previously called Context Media, raised nearly a half-billion dollars from an investor group that included Goldman Sachs, Democratic Illinois Gov. J.B. Pritzker\u2019s former venture fund, Google and Laurene Powell Jobs. The funding elevated the profile of the company and its young founders, putting a target on their backs.<\/p>\n

\u201cI had seen an article about it,\u201d David Ma, a former analyst at the company, testified Monday before the U.S. District Court for the Northern District of Illinois in Chicago. \u201cIn my opinion, they didn\u2019t deserve the funding they\u2019d received because it was all built on a lie.”<\/p>\n

On the day the deal was announced in May 2017<\/a>, he contacted a Wall Street Journal reporter who had written about the funding. \u201cIf you are interested, I have some additional information on Outcome Health that I\u2019d be willing to share (the-less-than-rosy-stuff, if you\u2019re open to hearing it),\u201d Ma\u2019s email said.<\/p>\n

About five months later, the paper published a story that the company had overbilled some of the pharmaceutical companies that bought ads on TVs and tablet computers running in doctors\u2019 offices. Two years later, co-founders Rishi Shah and Shradha Agarwal, along with former Chief Operating Officer Brad Purdy, were charged with multiple counts of fraud<\/a>.<\/p>\n

Ma, who was in graduate school at Stanford University when he blew the whistle, joined Outcome Health in 2014 after a brief stint at consulting firm Boston Consulting Group. Like Shah, Agarwal and Purdy, he was a young Northwestern University graduate.<\/p>\n

He is a key government witness in the third week of a trial that\u2019s expected to last three months. Ma has calmly and methodically detailed for jurors how he was intimately involved with the actions at Outcome Health that resulted in the charges that it committed fraud against customers, lenders and investors.<\/p>\n

Defense attorneys were quick to point out that Ma received immunity from prosecution and has applied to receive a cut of any monetary sanctions against the founders collected by the Securities and Exchange Commission under its whistleblower program. In addition to the criminal charges, Shah, Agarwal and Purdy face a civil suit by the SEC.\u00a0They deny the allegations.<\/p>\n

“You were looking to cash in?” asked Purdy’s lead attorney, Ted Poulos.<\/p>\n

Ma, who first took the stand last week, responded calmly: “I don\u2019t think that\u2019s true.”<\/p>\n

He has described in detail how he helped inflate numbers and provide inaccurate lists of doctors\u2019 offices that resulted in customers being billed improperly. A central theme of the fraud charges is that Outcome Health executives had for years knowingly sold more television screens than it had to pharmaceutical companies such as AbbVie and Pfizer.<\/p>\n

\u201cMy job was to use my skills in analytics and numbers to deceive, lie and withhold information from customers for the company\u2019s gain,\u201d Ma said.<\/p>\n

Although it took years for the first allegations of widespread fraud to surface publicly, there were earlier signs of trouble internally, Ma testified. He described how one customer demanded an audit after it was given a list of addresses where ads were supposed to be playing. But its salespeople showed up to discover competitors\u2019 ads running.<\/p>\n

In a message to a colleague, Ma said, \u201cI live in constant fear of an audit.\u201d<\/p>\n

\nMa testified that inventory was inflated beyond already-optimistic growth projections and performance measurements were made up \u2014 and that executives knew it. He spoke of a conversation with Agarwal, addressing the topic of overselling inventory. Ma said she responded: “‘We throw smoke bombs’\u00a0to clean up our operations later.”<\/p>\n<\/div>\n

The testimony echoed the prosecution\u2019s opening statement,<\/a>\u00a0in which it played a video of Shah describing in an interview how the company got started, by convincing doctors\u2019 offices and advertisers to sign up for a product that didn\u2019t yet exist. The defense says the fraud was the work of a rogue employee, Ashik Desai, who has pleaded guilty to wire fraud<\/a> and agreed to cooperate with prosecutors.<\/p>\n

<\/body>
\n<\/html><\/div>\n<\/div>\n<\/div>\n

<\/main><\/p>\n<\/div>\n<\/div>\n

Skip to main content February 14, 2023 06:40 AM Shradha Agarwal, left, and Rishi Shah The investigation that led to the downfall of Outcome Health started with a single email after the company made headlines with a blockbuster deal that valued it at more than $5 billion. The company, which was previously called Context Media<\/p>\n","protected":false},"author":1,"featured_media":608341,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[267,24839],"tags":[],"class_list":{"0":"post-608340","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-health","8":"category-outcome"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/608340","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=608340"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/608340\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/608341"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=608340"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=608340"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=608340"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}