Outcome Health built a network of TVs and computer monitors in doctors’ offices and charged drug companies millions of dollars to advertise on it. Co-founders Rishi Shah and Shradha Agarwal and former CEO Brad Purdy are accused of selling inventory the company doesn’t have, overpaying pharmaceutical customers, and boosting Outcome’s financial results. Health used to raise nearly $1 billion in loans and investments from Google’s Capital G and other investors.
It is unclear how many cases the defense teams plan to conduct when the trial resumes next week. Lawyers for Shah and Agarwal said they will decide later this week whether their client will testify. Purdy’s attorneys indicated it was unlikely he would stand his ground.
If they decide not to testify, final arguments could take place as soon as Tuesday, with the case set to go before a jury by the end of the week. If that happens, a trial originally scheduled to last 14 weeks could reach the jury in just nine weeks.
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The defense teams decided not to call the experts on the accounting and world of fast-growing startups they had planned ahead of the trial.
It is the responsibility of the government to prove that Shah, Agarwal and Purdy committed fraud, intentionally deceiving customers and investors for their own gain. Renato Mariotti, a former federal prosecutor who is now a partner at Bryan Cave Leighton Paisner, said it was very common for defendants to not bring the case.
“When considering whether to bring a defense case and how extensive a defense case should be, defense attorneys focus on the strength of the government case,” says Mariotti. “If the government’s argument is very weak, it can be argued that there is no defense at all.
“Ironically, the incentive to make a broad defense is highest when the government case is so strong. If a belief is almost certain, then a ‘Hail Mary’ might be worth a try.
Like most cases of office fraud, the trial was lengthy and complicated. Witnesses, including several Outcome Health employees, dug into the details of the digital advertising contract and accounting.
The case involved more than 1,300 pieces of evidence, ranging from emails and text messages to spreadsheets and voicemails. Both parties chose different documents — often different parts of the same long email chain — to provide very different versions of facts to jurors.
In just one example, prosecutors highlighted an email from Agarwal to Ashik Desai, an Outcome Health executive who pleaded guilty in the case and agreed to testify, as proof of intent. scam and hide it from others.
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“Whenever we go back and forth about what data to use, take the salesperson off the chain. I have found that their confidence level in our data varies significantly when presenting to customers if they believe the data is accurate versus contrived.”
However, the defense highlighted another part of the email in which Agarwal explained why she chose the number from a study to be higher than the number that employees found for a sales presentation. .
“I don’t always share backend thoughts with (sales) folks about how we get to a number (similar to matching lists when we build projects) but there is a template for how I do it.”
Defense attorneys must decide whether to roll the dice in the belief that they have created reasonable doubt and that the government has not proven their case or is trying to prove their client’s innocence and may let them testify.
Traditionally, defendants rarely testified in criminal trials because that exposed them to cross-examination by prosecutors.
“It is becoming more and more the norm. Kevin O’Brien, a former federal prosecutor who worked as a white-collar defense at Ford O’Brien Landy in New York. “If things are going badly, why not? You need a Hail Mary. The only way you get that is if the client convinces the jury.
It didn’t work for Elizabeth Holmes, the founder of medical technology startup Theranos, who stood up but was found guilty of fraud a year ago and sentenced to 11 years in prison. If convicted, Shah, Agarwal and Purdy face up to 30 years in prison.
This story first appeared in Crain’s Chicago Business.
