CHICAGO (Diya TV) — Three former executives of the Chicago-based health technology start-up Outcome Health were sentenced for their roles in a massive fraud scheme that targeted the company’s clients, lenders, and investors, securing approximately $1 billion in fraudulently obtained funds.

Rishi Shah, 38, co-founder and former CEO of Outcome Health, received a sentence of seven years and six months in prison on June 26. Shradha Agarwal, 38, co-founder and former president, was sentenced to three years in a halfway house on June 30. Brad Purdy, 35, the former chief operating officer and chief financial officer, was sentenced to two years and three months in prison on the same day.

According to the U.S. Department of Justice, the fraud involved selling advertising inventory that the company did not own to Outcome’s clients, which were primarily pharmaceutical companies, and under-delivering on these advertising campaigns. Despite the under-deliveries, Outcome Health invoiced its clients as if the full amount of advertising had been delivered. Shah, Agarwal, and Purdy concealed these under-deliveries by lying to clients and inflating metrics that purported to show how frequently patients engaged with Outcome’s tablets installed in doctors’ offices across the United States.

Outcome Health, originally known as Context Media before January 2017, installed television screens and tablets in doctors’ offices, selling advertising space on these devices. The fraud scheme, which began in 2011 and lasted until 2017, resulted in at least $45 million in overbilled advertising services, significantly overstating the company’s revenue for 2015 and 2016.

The deceit did not end with the company’s clients. Shah, Agarwal, and Purdy also misled Outcome’s lenders and investors by using inflated revenue figures in the company’s audited financial statements. These inflated figures helped Outcome Health secure $110 million in debt financing in April 2016, $375 million in debt financing in December 2016, and $487.5 million in equity financing in early 2017. The fraudulent revenue figures led to a $30.2 million dividend for Shah and a $7.5 million dividend for Agarwal.

“This was an elaborate, billion-dollar fraud scheme by three people who were supposed to be leaders of the company,” stated Timothy Langan, Executive Assistant Director of the FBI’s Criminal, Cyber, Response, and Services Branch. “Instead, these now former executives attempted to illegally line their own pockets.”

The U.S. Department of Justice revealed that Shah was convicted of five counts of mail fraud, ten counts of wire fraud, two counts of bank fraud, and two counts of money laundering. Agarwal was convicted of five counts of mail fraud, eight counts of wire fraud, and two counts of bank fraud. Purdy faced convictions on five counts of mail fraud, five counts of wire fraud, two counts of bank fraud, and one count of making false statements to a financial institution.

The fraudulent activities at Outcome Health had significant repercussions. The inflated financial statements allowed the company to grow from 16 employees in 2011 to more than 500 in 2017, with its value estimated at over $5 billion. Despite the high-profile sentencing, defense attorneys for Shah, Agarwal, and Purdy argued that the majority of the corporate victims have been largely repaid for their losses.