You’ve probably seen those screens in doctor's waiting rooms. They flicker with health tips, drug ads, and soothing nature scenes while you wait for your name to be called. For a long time, the face behind many of those screens was Rishi Shah. He was the wunderkind of Chicago’s tech scene, a dropout who built a company once valued at more than $5 billion.
Then it all came crashing down.
The story of the Rishi Shah Outcome Health scandal isn't just about a business failing. It is a cautionary tale of "fake it till you make it" culture taken to a criminal extreme. Honestly, the scale of the deception is still hard to wrap your head around. We are talking about a $1 billion fraud scheme that duped some of the smartest investors in the world—names like Goldman Sachs and Alphabet (Google’s parent company).
The Rise of a Chicago Tech Darling
Rishi Shah co-founded the company, originally called ContextMedia, back in 2006. He was just a student at Northwestern University at the time. The idea was simple but clever: put TVs and tablets in medical offices and sell advertising space to pharmaceutical companies. Pharma giants like Novo Nordisk were happy to pay because they were reaching patients at the exact moment they were thinking about their health.
For years, it looked like a massive success.
By 2017, the company—rebranded as Outcome Health—was the talk of the town. Shah was a billionaire on paper, appearing on Forbes lists and rubbing elbows with high-profile politicians. He lived the life to match, with a $10 million mansion and private jet trips. But behind the glass walls of their fancy Chicago headquarters, the numbers didn't actually add up.
👉 See also: Exchange rate of dollar to uganda shillings: What Most People Get Wrong
What Most People Get Wrong About the Fraud
People often think corporate fraud is just about hiding losses. With Outcome Health, it was more aggressive. They weren't just "spinning" the truth; they were selling inventory that literally didn't exist.
Essentially, they told pharmaceutical companies their ads were running on thousands of screens that hadn't even been installed yet. When the clients asked for proof, the company allegedly sent over falsified data and manipulated "affidavits" of performance.
The Rishi Shah Outcome Health case hinged on these core deceptions:
- Ghost Screens: Selling ad space in 10,000 offices when they only had 5,000.
- Inflated Engagement: Making it look like patients were interacting with tablets more than they actually were.
- Faked Revenue: Using the money from these "ghost" contracts to inflate their books, which they then used to lure in massive investments.
In 2017, the Wall Street Journal published a bombshell investigation that pulled the thread. Investors who had just poured $487.5 million into the company realized they might have bought into a mirage.
The Legal Hammer Drops
The trial was a marathon. It lasted ten weeks in early 2023, featuring testimony from former employees who described a culture where hitting numbers mattered more than being honest. One key witness was Ashik Desai, a former executive who pleaded guilty and testified against his old bosses.
✨ Don't miss: Enterprise Products Partners Stock Price: Why High Yield Seekers Are Bracing for 2026
Shah’s defense tried to argue that he was just a young, overwhelmed CEO who didn't know the specifics of what his sales team was doing. The jury didn't buy it.
In April 2023, Rishi Shah was convicted on 19 counts, including wire fraud, mail fraud, and money laundering. His co-founder Shradha Agarwal and former COO Brad Purdy were also hit with multiple convictions.
The Sentence and Current Status
Fast forward to mid-2024. The sentencing phase brought the finality many had been waiting for. U.S. District Judge Thomas Durkin didn't go as hard as prosecutors wanted—they were asking for 15 years—but he didn't let Shah off easy either.
Rishi Shah was sentenced to 7.5 years in federal prison. The judge noted that while Shah had a lot of potential and no prior criminal record, he was "driven by greed" and a desire to be a "big shot." As of early 2026, Shah is navigating the appeals process, but the legal reality remains a massive weight. Shradha Agarwal was sentenced to three years in a halfway house, a move that reflected her different level of involvement compared to Shah.
Why This Case Still Matters Today
The Rishi Shah Outcome Health saga changed how venture capitalists look at high-growth startups. The "trust but verify" mantra became a lot more about the "verify" part.
🔗 Read more: Dollar Against Saudi Riyal: Why the 3.75 Peg Refuses to Break
If you are an entrepreneur or an investor, there are some pretty blunt lessons here:
- Audits aren't foolproof. Outcome’s auditors signed off on the 2015 and 2016 numbers because they were fed fabricated data. Real due diligence requires looking past the spreadsheets.
- Culture is a leading indicator. When a company silences whistleblowers or has a high turnover in the C-suite (like Outcome did with its COO Vivek Kundra), it’s usually a sign of rot.
- Governance is boring but necessary. Most of the fraud happened because there weren't enough checks and balances. Founders with too much power and too little oversight are a risk.
The company itself didn't totally disappear; it merged with a rival called PatientPoint in 2021. But the brand "Outcome Health" is forever linked to one of the biggest corporate collapses in Chicago history.
Moving Forward: Actionable Insights for the Tech World
If you’re following this case because you work in tech or healthcare, the fallout provides a roadmap for what to avoid. Transparency isn't just a buzzword; it’s a legal shield.
Next Steps for Founders and Leaders:
- Implement independent reporting lines: Ensure your sales and data teams aren't grading their own homework.
- Verify third-party data: If you sell advertising or "eyes on screens," use independent verification services early on to build trust.
- Watch the "Dividend" red flags: In the Outcome case, a huge chunk of the investment—$225 million—went directly to the founders as a dividend. In the startup world, that's often a sign that people are looking for the exit before the work is done.
The legacy of Rishi Shah is a reminder that in the world of high-stakes business, the truth always has a way of catching up.