A timeline of the Outcome Health fraud scheme and fallout

Outcome Health's co-founders and several other former employees are currently facing felony charges of fraud in federal court, stemming from an FBI investigation into the healthcare technology startup's financial activity from 2014 to 2017.

Here is a timeline of Becker's Hospital Review's coverage of the controversy that has plagued the Chicago-based startup since late 2017:

Oct. 13, 2017: An investigation by The Wall Street Journal alleges Outcome Health's employees have manipulated pricing and sales information to purposely mislead potential pharmaceutical advertisers. Sources tell the outlet at the time that the employees involved sold more advertising space than was available and altered performance surveys and third-party analyses.

In a statement to Becker's, Outcome co-founder and CEO Rishi Shah writes, "If at any point we learn that a customer was misled in any way, we will share that promptly with the customer and remedy the situation immediately. … We appreciate the hard work of our dedicated employees, and want to reiterate that adherence to our policies is not optional — anyone who violates them will be held accountable."

Nov. 7, 2017: A group of Outcome Health's investors file a lawsuit in New York State Supreme Court, alleging the company engaged in fraud and breach of contract by providing investors with false data and financial reports. The lawsuit claims Mr. Shah and his co-founder Shradha Agarwal "either knew of, or recklessly disregarded" the alleged manipulation.

Nov. 21, 2017: More than one-third of Outcome's employees — about 200 of 535 — accept a voluntary buyout to leave the company over the next few weeks in return for 90 days of severance pay.

Jan. 26, 2018: The company and its investors settle the lawsuit. As part of the settlement, Mr. Shah and Ms. Agarwal step down from their roles as CEO and president, respectively, while maintaining their leadership positions on Outcome's board of directors.

Additionally, the co-founders, equity investors and lenders recommit $159 million to the company.

June 14, 2018: Not long after naming four new members to its board of managers, Outcome Health announces the addition of Matt McNally, former group president and chief media officer of Publicis Health, as its new CEO.

June 21, 2018: Mr. Shah and Ms. Agarwal resign from the board of directors, citing "a desire to provide clear leadership transition for the new management team," according to a news release.

Jan. 16, 2019: Outcome Health appoints its first-ever chief compliance officer, John Vaughn, who had previously held the same role at Danaher Dental Platform. Mr. Vaughn is tasked with leading development and implementation of compliance policies and procedures as part of an updated corporate compliance program.

May 9, 2019: The company sells the majority stake of its business to a private equity firm. Though the exact selling price is not disclosed, Outcome says the funding will be used to fund long-term strategic plans and the company's ongoing attempts to win back investor, advertiser and customer trust.

July 24, 2019: An FBI affidavit is unsealed, revealing allegations that Mr. Shah, Ms. Agarwal and other former executives and employees engaged in fraudulent practices between 2014 and 2017.

Among the allegations are the claims that Outcome Health "defrauded some of its pharmaceutical clients by, and among other things, falsely representing to clients that it had in its network specific doctors that the pharma clients were targeting for advertising, lying to clients about how many TVs and tablets the clients' advertisements were running on," and "fraudulently alerting key performance metrics."

Additionally, per the investigation, "certain Outcome employees utilized false and misleading performance studies and accounting records to raise money on at least two separate occasions: (1) a $300 million loan in 2016, and (2) a $500 million capital raise in March 2017."

Oct. 30, 2019: The startup reaches a non-prosecution agreement with the U.S. Department of Justice. In resolution documents, the company admits its former employees defrauded clients between 2012 and 2017 and agrees to distribute $70 million to victims of the fraud scheme, participate in the DOJ's continued investigation into the fraudulent activity and enhance their internal compliance program.

Nov. 25, 2019: An unsealed indictment reveals that Mr. Shah, Ms. Agarwal and Brad Purdy, the startup's former CFO, have been charged with multiple counts of mail and wire fraud and one count of bank fraud. In addition, Mr. Shah faces two counts of money laundering, and Mr. Purdy faces one count of making a false statement to a bank.

The SEC brings additional charges against the trio on the same day, claiming they committed civil securities fraud and demanding the co-founders pay back any illegally raised investments.

All three former executives deny the allegations.

Dec. 5, 2019: Two of the company's former analysts, Kathryn Choi and Oliver Han, appear in federal court in Chicago, where they plead not guilty to charges of felony conspiracy to commit wire fraud, the Chicago Tribune reports. Their indictments were handed down by the Justice Department on Nov. 14, alongside one count of wire fraud for Ashik Desai, former chief growth officer, who oversaw Ms. Choi and Mr. Han's work, and who resigned from the company shortly after WSJ's initial investigation was published.

Their charging documents reportedly claim the alleged actions of Ms. Choi, Mr. Han and their co-conspirators resulted in clients' losing up to $65 million in 2015 and 2016.

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