Prosecutors froze $10 million when Shah and Agarwal were indicted in 2019. During a forfeiture hearing scheduled for this morning, the Justice Department will attempt to convince U.S. District Judge Thomas Durkin that much more money.
Shah, Agarwal and Brad Purdy, the former CEO of Outcome Health, were convicted in April of more than a dozen counts of fraud after a 10-week trial in Dirksen Federal Court. Along with Theranos founder Elizabeth Holmes, who just started serving an 11-year sentence, Outcome Health is one of the largest scams involving a startup.
Shah, Agarwal and Purdy each faced 30 years in prison when they were sentenced in the fall.
Meanwhile, prosecutors are pursuing the money Shah and Agarwal received from dividend payments as part of transactions with investors and lenders. Purdy did not receive the payment.
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Prosecutors say Outcome Health billed drug makers, such as AbbVie, for millions of dollars more in advertising dollars than they received, increasing the company’s revenue by about 25%.
Investors relied on those financing to invest more than $600 million in the company in 2016 and 2017. Those investors include Goldman Sachs, Google, and the Pritzker Group Venture Capital run by Governor JB Pritzker before he took office and its lenders include JP Morgan Chase.
Shah and Agarwal initially received $262 million in dividends before investors sued and recovered all but about $69 million. Shah owns 80% of the company. Among the Shah’s assets that prosecutors want to seize are his mansion at 924-926 N. Clark St., $10.5 million in venture capital and $17.6 million in cash .
This story first appeared in Crain’s Chicago Business.
