Google And Goldman Sachs Get Ripped Off: Indian-American Billionaire Pulls A ₹8,300 Crore Scam

Google And Goldman Sachs Get Ripped Off: Indian-American Billionaire Pulls A ₹8,300 Crore Scam

The scam revolves around a Rs 8,300 crore (USD 1 billion) fraud scheme that rocked prominent investors like JB Pritzker, the governor of Illinois, Goldman Sachs Group, and tech giant, Alphabet Inc., the parent company of Google.

G R MukeshUpdated: Tuesday, July 02, 2024, 11:36 AM IST
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A United States court has sentenced Indian-American businessman Rishi Shah, the former billionaire co-founder of Outcome Health, to seven and a half years in prison.

The scam revolves around a Rs 8,300 crore (USD 1 billion) fraud scheme that rocked prominent investors like JB Pritzker, the governor of Illinois, Goldman Sachs Group, and tech giant Alphabet Inc., the parent company of Google. US District Judge Thomas Durkin put an end to one of the biggest cases of corporate fraud in recent memory.

What is the 'Outcome Health' scam?

Mr. Shah had the idea for Outcome Health when he was in college. The company, which was founded in 2006 under the name Context Media Health, had the idea to transform medical advertising by putting televisions in doctor's offices and using those TVs to show patient-focused health advertisements.

Upon the arrival of co-founder Shradha Agrawal, Mr. Shah's company experienced exponential growth in terms of valuation. This growth was attributed to the innovative ad placement strategy employed to bridge the communication gap between healthcare providers and patients.

Convicted of Fraud

In April 2023, Brad Purdy, the company's CFO, and Shradha Agarwal, president and co-founder, were found guilty alongside Shah.The fraud was discovered in 2017 when investors sued Shah's Outcome, alleging fraud connected to a USD 487.5 million (Rs 4072 crore) fundraising campaign that year that resulted in a USD 225 million (Rs 1879 crore) dividend that Shah and Agarwal kept for themselves.

verdict for executives

Rishi Shah, the former co-founder and CEO of the company, received a seven and a half-year prison sentence for his involvement in the fraud. Brad Purdy, the former chief financial officer and operator of the company, was given a 27-month prison sentence on Thursday afternoon.

The former president and co-founder of the startup "Outcome Health" was found guilty of fraud, and she was sentenced to three years in a halfway house.

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