The Wall Street Journal reported that former executives at health care technology company Outcome Health falsely inflated data and unfairly billed clients for advertisements, according to the indictment unsealed Nov. 25. Desai oversaw sales and analytics at Outcome Health.
Officially charged on Nov. 14, Desai now faces up to 20 years in prison, according to The Wall Street Journal.
Outcome Health over-billed advertisers for at least $25 million and its revenue was falsely inflated by approximately 20% in both 2015 and 2016, Crain’s Chicago Business reported. The company allegedly deceived well-known investors such as Goldman Sachs, Alphabet Inc., and an investment firm founded by Illinois Governor J.B. Pritzker, according to The Wall Street Journal.
The U.S. Department of Justice began investigating Outcome Health two years ago after a Wall Street Journal article reported that the company had misinformed customers through fake reports, distorted data, and charged pharmaceutical companies for running advertisements on their TV screens that had not yet been installed in waiting rooms.
Following the article’s release, The Wall Street Journal reported investors sued the company for fraud. After denying any fault, former Outcome Health chief executive Rishi Shah and former president Shradha Agarwal later resigned from their executive positions and settled with the investors, according to The Wall Street Journal.
Shah, Agarwal, and former Outcome Health chief financial officer Brad Purdy were indicted with multiple counts of mail and wire fraud and two counts of bank fraud, The Wall Street Journal reported. The three each face up to 30 years in prison.
According to the indictment, Agarwal sent Shah an audio message saying Sameer Kazi, a recently hired operating chief, accused Desai of fabricating data, adding that the company was “operating an unethical business,” The Wall Street Journal reported. Agarwal added Kazi received multiple complaints from Outcome Health executives about the unethical business practices.
Less than three weeks after being hired, Kazi confronted Shah about the company’s unethical practices and left Outcome Health, according to The Wall Street Journal.
Desai did not respond to a request for comment.
Originally from New York, Desai enrolled at Northwestern University in 2010 as an undergraduate student in the Honors Program in Medical Education. Desai told Crain’s Chicago Business he originally planned to become a physician, following in his father’s and grandfather’s footsteps. He said his interest in business beyond health care led him to Outcome Health.
After his first year at Wharton earlier this spring, Desai received an honors distinction awarded to students with a GPA in the top 20% of the class. Crain’s Chicago Business also named Desai to Crain’s “20 in their 20’s” list in 2016.
Founded in 2006, Outcome Health releases products such as exam room tablets and waiting room flat screen TVs to stream pharmaceutical ads. By 2017, the company had raised nearly $500 million of capital, while claiming to be valued over $5 billion, according to The Wall Street Journal.