Rishi Shah (born 1986) is an American businessman convicted of fraud and a former chairman and CEO of Outcome Health, which he co-founded.[1][2][3]
Rishi Shah | |
|---|---|
| Born | 1986 (age 37–38) |
| Education | Northwestern University (dropped out) |
| Occupation | Businessman |
| Title | Chairman, JumpStart Ventures |
| Parent(s) | Upendra Shah Sonal Shah |
Early life
editRishi Shah was born in 1986 in Oak Brook, Illinois,[4] the son of Sonal Shah and her husband Dr Upendra Shah, an endocrinologist.[2] He was educated at Hinsdale Central High School and Northwestern University, but dropped out to start a business career.[2]
Career
editShah developed a business plan for ContextMedia at Northwestern with classmates Derek Moeller and Shradha Agarwal in 2006 to distribute health educational content to doctors' offices and waiting rooms monetized by ad revenue from pharmaceutical companies.[5] ContextMedia grew revenues 2,965% from 2010 to 2015 to $63.5 million with Shah as CEO, ranking it as the 6th fastest-growing private company in Chicago in 2016.[6] In 2017, ContextMedia rebranded itself as Outcome Health.[7]
In May 2017, Outcome Health raised over $500 million from investors led by Goldman Sachs, CapitalG, and Pritzker Group at a $5.6 billion valuation.[1] This is the largest single funding round since Groupon in 2011, when it raised $950 million in its fifth funding round.[2] In 2017, Forbes estimated Shah's net worth at $3.6 billion based on his 80% stake in Outcome Health.[1]
Investors in Outcome Health sued the company, Shah, and Agarwal in November 2017, claiming fraud and breach of contract.[8] This followed a Wall Street Journal investigation published in October 2017 alleging that Outcome Health misled advertisers with manipulated information.[9] In January 2018, Outcome Health announced that the lawsuit has been settled, with the founders reinvesting $159 million of their $225 million investment dividends back into the company.[10] Shah resigned as Chairman and CEO as part of the settlement.[11]
Legal
editIn November 2019, Shah and coworkers were charged for their alleged roles in a fraud scheme that targeted the company’s clients, lenders and investors, and involved approximately $1 billion in fraudulently obtained funds.[12]
On April 11, 2023, Shah and two other Outcome Health executives were convicted and found guilty of multiple counts of committing fraud. Shah was found guilty of five counts of mail fraud, 10 counts of wire fraud, two counts of bank fraud, and two counts of money laundering.[13]
On June 25, 2024, Shah was sentenced to 7.5 years in prison for his role in a $1 billion fraud scheme. Alongside Shah, Outcome Health co-founder Shradha Agarwal and former COO Brad Purdy were also found guilty, with their sentencing scheduled for later in the same week.[14][15]
References
edit- ^ a b c Konrad, Alex. "This 31-Year-Old Is Worth $3B For Bringing Drug Marketing Into Your Doctor's Office". forbes.com. Retrieved August 27, 2017.
- ^ a b c d "Chicago's newest billionaire, 31-year-old Rishi Shah, is self-made". suntimes.com. Retrieved August 27, 2017.
- ^ "Former Executives of Outcome Health Convicted in $1B Corporate Fraud Scheme". www.justice.gov. 2023-04-11. Retrieved 2023-04-12.
- ^ "Bloomberg Billionaires Index - Rishi Shah". Bloomberg.com. Retrieved January 30, 2018.
- ^ Marotti, Ally. "Outcome Health's path: From a Northwestern classroom to the courtroom". chicagotribune.com. Retrieved January 25, 2018.
- ^ Pletz, -John. "#Fast50: See why @ContextHealth is one of #Chicago's fastest-growing companies". Crain's Chicago Business. Retrieved January 25, 2018.
- ^ Graham, Meg. "ContextMedia has a new name: Outcome Health". chicagotribune.com. Retrieved January 25, 2018.
- ^ Marotti, Ally. "Major investors sue Outcome Health, alleging firm committed fraud to secure $487.5M investment". chicagotribune.com. Retrieved January 25, 2018.
- ^ Winkler, Rolfe (October 13, 2017). "Outcome, a Hot Tech Startup, Misled Advertisers With Manipulated Information, Sources Say". Wall Street Journal. ISSN 0099-9660. Retrieved January 25, 2018.
- ^ Winkler, Rolfe (January 29, 2018). "Outcome Health Says CEO Rishi Shah Has Resigned, Lawsuit Settled". Wall Street Journal. ISSN 0099-9660. Retrieved January 29, 2018.
- ^ "The 31-year-old CEO of startup Outcome Health stepped down just 8 months after raising $500 million". Business Insider. Retrieved January 31, 2018.
- ^ "Former Executives and Employees of Health Technology Start-Up Charged in a $1 Billion Scheme to Defraud Clients, Lenders and Investors". www.justice.gov. November 25, 2019. Retrieved November 26, 2019.
- ^ "Former Executives of Outcome Health Convicted in $1B Corporate Fraud Scheme".
- ^ "CEO in Major Health-Advertising Fraud Gets 7.5-Year Prison Sentence".
- ^ "Former Outcome Health CEO Rishi Shah sentenced to 7 ½ years in prison for role in fraud". Chicago Tribune. 2024-06-26. Retrieved 2024-07-05.