Rishi Shah, an Indian-American businessman, has been sentenced to seven and a half years in prison for a Rs 8,300 crore ($1 billion) fraud involving his advertising startup. The fraud scheme deceived high-profile investors such as Goldman Sachs Group Inc, Google parent Alphabet Inc and Illinois Governor JB Pritzker’s venture capital firm.
Mr Shah, the co-founder of Outcome Health, was indicted on over 12 counts of fraud and money laundering. He was convicted in April 2023, along with his company co-founders Shradha Agarwal and Brad Purdy. The judge sentenced Agarwal to three years in a halfway house and Purdy to two years and three months in prison.Â
The US Securities and Exchange Commission also filed a civil lawsuit against Shah, Agarwal, Purdy and former chief growth officer Ashik Desai, who pleaded guilty before the trial.
Who is Rishi Shah?
1. Rishi Shah is a technology investor and entrepreneur who co-founded JumpStart Ventures in 2011. As the Chairman and Managing Director of the company, he made over 60 direct investments in health technology, education technology and media.
2. Rishi Shah, the son of a doctor, attended Harvard’s summer economics programme in 2005. He then studied at Northwestern University for a year before dropping out to start his own business.
3. In 2006, Shah founded Outcome Health, formerly known as Context Media Health. The company installed TVs at doctors’ offices to stream health ads targeted at patients. Under his leadership, Outcome Health grew significantly in valuation and became a crucial player in the tech and healthcare investment communities by the mid-2010s.
4. The 38-year-old serves on the Board of Directors of Young Presidents Organisation (YPO), 1871 and MATTER, a community of healthcare innovators and incubator for ideas. He also advises technology startup accelerator/incubator programs, nonprofits and universities.
5. Rishi Shah’s net worth was falsely inflated to over $4 billion in 2016. The truth emerged in 2017 when the Wall Street Journal exposed fraudulent activities at Outcome Health. Investors, including Goldman Sachs and Alphabet, sued the company for fraud, revealing that Shah and his co-founder had profited while investors were left with worthless stakes.
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