‘There was so much he didn’t know’: Attorney for former Outcome exec defends him against fraud charges

So far, much of the spotlight in the Outcome Health trial has focused on co-founders Rishi Shah and Shradha Agarwal, who were once stars of Chicago’s tech community.

But on Monday, an attorney for the third defendant in the case, Brad Purdy, got his shot at defending Purdy in closing arguments. Purdy was formerly Outcome’s chief operating officer and chief financial officer.

The trial is in its 10th week, and Monday was the fourth day of closing arguments, after attorneys for the government, Shah and Agarwal took their turns.

Government prosecutors allege that when Shah, Agarwal and Purdy were at Outcome, they lied about how many doctors’ offices had Outcome screens and tablets that could run drug company ads. Prosecutors allege the three then used those false numbers to overcharge drug companies for advertising and inflate revenue figures used to get cash from lenders and investors, in what became a $1 billion fraud scheme.

Purdy, Shah and Agarwal now face charges of bank, mail and wire fraud. Shah also stands accused of money laundering, and Purdy of making false statements to a financial institution. All three have pleaded not guilty to the charges.

Like other defense attorneys in the case, attorney Theodore Poulos argued that a fourth Outcome executive, Ashik Desai, was to blame for the fraud, not Purdy. Desai lied to Purdy about falsifying return-on-investment reports “because Brad wasn’t in it with him,” and lied about a phone call between him and Purdy that Poulos said never happened. There’s no phone record to corroborate Desai’s assertion, he said.

Desai has pleaded guilty to one count of wire fraud. Desai struck a plea deal with prosecutors that they would recommend no more than 10 years in prison if he cooperated with them and testified truthfully.

“He was facing many, many years for what he had done, and there was only one way out,” Poulos said of Desai. “He fed (government prosecutors) certain critical lies about the people upstairs because he knew that’s what they wanted to hear.”

Poulos noted that the case involving the three defendants is complex, with about 1,500 exhibits in the forms of emails, voice messages and other documents and communications.

During prosecutors’ closing arguments, they highlighted several communications involving Purdy, including one in which Desai told him about “heavily inflated” metrics related to ads running on tablets and another in which an analyst told him that certain tablet metrics were “not real.”

But Poulos told the jury to pay attention to the many communications on which Purdy was not included.

“There are so many communications in these 1,500 that Brad’s not on,” Poulos said. “There was so much he didn’t know.”

Poulos also cautioned jurors not to assume that Purdy was in on the fraud because he was the chief operating officer and chief financial officer. He repeatedly emphasized Purdy’s youth at the time and lack of any accounting background.

“I think you’ve seen and heard from evidence in this case that those titles did not accurately capture or convey what those titles might mean in a more mature or established company,” Poulos said. “It was just a title.”

Poulos also argued that Outcome often sold drug companies contracts on a weighted average basis, meaning they expected that the number of screens on which ads would run would average out over time.

“If it’s weighted average … there’s no reason to think hearing about an under delivery at some point in time is the red flag, oh my God, we’re committing fraud,” Poulos said.

Poulos is expected to continue with his closing arguments Tuesday. The jury might begin deliberations later this week.

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