Date: 04-11-2023

Case Style:

United States of America v. Rishi Shah, Shradha Agarwal and Brad Purdy

Case Number: 1:19-cr-00864

Judge: Thomas M. Durkin

Court: United States District Court for the Northern District of Illinois (Cook County)

Plaintiff's Attorney: United States District Attorney's Office in Chicago

Defendant's Attorney:

Description: Chicago, Illinois criminal defense lawyers represented Defendants charged with frauds and swindles, bank fraud, and wire fraud.


In 2006, Shah and Agarwal founded a company called Outcome Health to sell electronic advertising on screens in doctor's office waiting rooms. The company grew rapidly. To fund expansion, the company obtained a $110 million loan in early 2016, followed by a $375 million loan in late 2016. By 2017, the company employed over 500 people. That year, the company raised about $487.5 million from equity investors.

As a result, the company paid a $225 million dividend to Gravitas Holdings, LLC, an entity controlled by Shah and Agarwal.

Later in 2017, the press reported that the company had "misled pharmaceutical companies by charging them for ad placements on more video screens than [had been] installed" and "provided inflated data to measure how well ads performed." R. 75-2 at 3. Subsequently, the company became the subject of government investigations, and its investors and lenders filed complaints against the company, Shah, and Agarwal, in New York and Delaware courts. Shah and Agarwal also asserted claims against the investors and lenders, although they never filed causes of action in any court.

Those disputes were settled on January 26, 2018. The parties mutually released their claims in exchange for the following consideration:

¦ Shah and Agarwal resigned from the company and gave up their controlling interest in the company, by surrendering nearly 50% in equity;

¦ Shah and Agarwal paid $159 million to the company;

¦ Shah and Agarwal paid $31 million to the investors;

¦ Shah and Agarwal waived their company-provided legal indemnification coverage;

¦ Shah and Agarwal were paid severances of $400,000 and $500,000, respectively;

¦ The company, investors, and lenders permitted Shah and Agarwal to keep remaining legal retainers that had already been paid to law firms; and

Page 3

¦ The company, investors, and lenders permitted Shah and Agarwal to keep about $31 million in equity in Gravitas.


In anticipation of the indictment in this case, Shah and Agarwal transferred about $10.3 million of the $31 million they received in the settlement to their attorneys' firms' accounts. Shah and Agarwal do not dispute that this $10.3 million is traceable to the $31 million they received in the settlement. They also do not dispute that the $31 million is traceable to the $225 million dividend they received after the $487.5 million equity investment the company received in 2017.

The government seeks to freeze the $10.3 million as forfeitable. Shah and Agarwal argue that they require these funds to retain their current counsel. The Court has received some evidence regarding Shah and Agarwal's other assets potentially available to pay their attorneys. Besides the $10.3 million at issue on this motion, Shah has about $4 million on account with his attorneys leftover from prior indemnification payments made by the company on his behalf. Agarwal has about $1 million in cash. They both own properties valued in excess of $1 million that are currently used as primary residences. Shah and Agarwal presented evidence of extensive current and anticipated debts. By contrast, the government presented evidence indicating that Shah and Agarwal continue to maintain positive net cash flows. See R. 94 (and documents cited therein). Current counsel estimate that Shah and Agarwal's defense will cost about $14-15 million.

04/04/2023 437 MINUTE entry before the Honorable Thomas M. Durkin: as to Rishi Shah, Shradha Agarwal, Brad Purdy. Closing arguments held on 4/4/2023 and continued to 4/5/2023 at 8:30 a.m. Mailed notice. (ecw, ) (Entered: 04/04/2023)
04/05/2023 438 WAIVER of Forfeiture Determination by Jury as to Rishi Shah. (ecw, ) (Entered: 04/05/2023)
04/05/2023 439 WAIVER of Forfeiture Determination by Jury as to Shradha Agarwal. (ecw, ) (Entered: 04/05/2023)
04/05/2023 440 WAIVER of Forfeiture Determination by Jury as to Brad Purdy. (ecw, ) (Entered: 04/05/2023)
04/05/2023 441 MINUTE entry before the Honorable Thomas M. Durkin: as to Rishi Shah, Shradha Agarwal, Brad Purdy. Closing arguments completed on 4/5/2023. Jury deliberations begun. Mailed notice. (ecw, ) (Entered: 04/05/2023)
04/06/2023 442 Joint Submission Regarding Final List of Exhibits Admitted During Trial by USA as to Rishi Shah, Shradha Agarwal, Brad Purdy (Attachments: # 1 Text of Proposed Order)(Appleby-Bhattacharjee, Saurish) (Entered: 04/06/2023)
04/07/2023 443 ORDER as to Rishi Shah, Shradha Agarwal, Brad Purdy. Signed by the Honorable Thomas M. Durkin on 4/7/2023. Mailed notice. (ecw, ) (Entered: 04/07/2023)
04/10/2023 444 FINAL JURY Instructions as to Rishi Shah, Shradha Agarwal, Brad Purdy. (ecw, ) (Entered: 04/10/2023)
04/11/2023 445 REDACTED Verdict Form as to Rishi Shah, Shradha Agarwal, Brad Purdy. (ecw, ) (Entered: 04/11/2023)
04/11/2023 446 MINUTE entry before the Honorable Thomas M. Durkin: as to Rishi Shah, Shradha Agarwal, Brad Purdy. Jury deliberations concluded on 4/11/2023. By 4/18/2023, the parties are to submit via email to the courtroom deputy an agreed proposed briefing schedule on post-trial motions, and a suggested forfeiture hearing date. Mailed notice. (ecw, ) (Entered: 04/11/2023)

Outcome: 04/11/2023 447 JURY Verdict as to Rishi Shah (1) guilty on Count 1-2,4,5,9,10,11,12,13,14-19,22,24,25,26 and Shradha Agarwal (2) guilty on Count 1-2,4,9,11,13,14-18,22,24,25,26 and Brad Purdy (3) guilty on Count 1-2,3,4,7,8,9,13,22,23,24,25,26. Verdict form emailed to defendant's counsel of record as to Rishi Shah, Shradha Agarwal, Brad Purdy (RESTRICTED.) (jn, ) Modified on 4/11/2023 (jn, ). (Entered: 04/11/2023)

Plaintiff's Experts:

Defendant's Experts:

Comments: