Indian-American businessman Rishi Shah has been sentenced to seven-and-a-half years in prison for a Rs 8,300 crore ($1 billion) fraud linked to his advertising startup that defrauded 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 charged with more than 12 counts of fraud and money laundering. He was convicted in April 2023 along with his company co-founders Shraddha 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.
The US Securities and Exchange Commission also filed a civil suit against Shah, Aggarwal, Purdy and former chief development officer Ashik Desai, who pleaded guilty before trial.
Who is Rishi Shah?
1. Rishi Shah is a technology investor and entrepreneur who co-founded Jumpstart Ventures in 2011. As the company’s chairman and managing director, he made over 60 direct investments in healthcare technology, education technology, and media.
2. Rishi Shah, the son of a doctor, attended Harvard’s summer economics program 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 televisions in doctors’ offices to show patient-oriented health advertising. Under his leadership, Outcome Health’s valuation increased significantly and by the mid-2010s it had become a significant player in the technology and healthcare investment communities.
4. The 38-year-old serves on the boards of the Young Presidents Organization (YPO), 1871 and MATTER, a community of innovators and an incubator for ideas in the healthcare space. 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 came to light 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 made profits while investors were left with worthless stakes.