Guilty of Fraud! —Three Former Digital OOH Place Based Network Exec’s
Facts and Editorial
by ‘William Board’ and some assistance from Brent Baer, Publisher, OOH Today
There was a day when Outcome Health was considered the leader in healthcare innovation transforming the point of care experience as the largest digital out-of-home network in physician offices and health systems. They were playing in the big time, employing 600+, pulling down top rates from Pharma accounts with 2016 revenues over $125 million. Offices in NYC and Chicago. And here’s the tell, Outcome claimed over 230,000 healthcare providers nationwide.
Then all holy auditing hell broke loose. Accusations rained in, ranging from providing inflated data measuring ads’ performance, creating documents inaccurately verifying ads running on certain doctors’ screens, manipulated third-party analyses regarding the effectiveness of the ads and charging for ad placements on more video screens than the startup had installed. OOH Today reported this October 1, 2018 here ⇒Digital Place Based Media Network has Some Explaining to Do
Those were the days of fraud, according to a federal jury who wasted no time in finding the cofounder and former CEO, Rishi Shah, former president, Shradha Agarwal and former chief operating officer and chief financial officer, Brad Purdy, guilty of multiple counts of fraud on Tuesday. The three former executives of health tech company, Outcome Health, which is now part of a merged Patient Point, were convicted for their roles in a $1 billion scheme that defrauded investors and clients, largely pharmaceutical companies.
The digital OOH placed based network startup founded in Chicago, was formally known as Context Media. The digital network provided screens and tablets in doctor’s offices then sold ads to the likes of big time pharmaceutical companies like Johnson & Johnson, AstraZeneca, Bayer, check out the graphic from their former website below.Executives of Outcome Health, as uncovered initially by an investigative piece by The Wall Street Journal and revealed again in trial as evidence, were found guilty of selling inventory space they did not have. They billed advertisers millions, all the while providing misleading data. So accurate OOH data does matter.
Ever wonder why our Industry struggles in this category? Don’t kid yourself, its not the ‘Adequate Provision’ or ‘Brief Summary’ small print as often blamed when your sales team is sent packing or not even provided an opportunity to pitch. Arguably to some degree (does it really matter to what extent?) rejection lies with the knowledge of unscrupulous behavior of those who would have advertisers believe they are receiving OOH coverage that indeed, are not. Yes, their are other objections to be sure but why does this particular ill continue to plague us?
The iron of ironies, back in October 2018, OOH Today shared that Outcome had recently received an Independent Certification for Audience Qualification and Impression Measurement from BPA Worldwide, on September 27, 2017. Announcing the certification, BPA’s Senior Vice President of Technology Assurance, Richard Murphy said, “We congratulate Outcome Health as the first health intelligence platform in the industry to receive third-party certification of their point-of-care network.” “The industry is calling for more trust and transparency and Outcome Health is answering the call.” Trust and transparency. I imagine someone is sorry they picked up that phone.
The head shaking shame besides the Certification, Outcome was paid by clients as if they had delivered the ads. Hummm… No, we won’t go there, today.
The 3 former Outcome Health ‘OOH newbies’, as I refer to people of a certain limited number of years with credible experience in our Industry, were also convicted of defrauding both investors and lenders hundreds of millions, including the likes of Goldman Sachs Group, Outcome raised rounds of debt financing in 2016 and nearly $500 million in equity in 2017. But let’s not lose sight of the one’s defrauded who really impact our Industry, ADVERTISERS.
It pays to know who you are dealing with, what experience they actually have in the OOH Industry, their measurement creds (anyone say Geopath), auditing (not internal that’s for sure) and here’s a thought to consider for a few of you who need to pay greater attention to your fast friends, whom you vouch for, represent or endorse, be it individual(s) or ehem, organizations and associations. Just because they have the smooth tech talk, an impressive degree and the dough to join your party, doesn’t mean they should be allowed through the door. After all, if you endorse them, doesn’t that tarnish you to some extent as well? Verify man. Verify.
OOH Today’s strongly voiced suggestions a little over three years ago corrected some of those issues. There is more work to be done with the challenges of imposters and posers. Back on track of the fraudsters at Outcome Health.
The results of the trial were; Shah was convicted on 19 counts of mail, wire and bank fraud and money laundering. Agarwal was convicted of 15 counts of mail, wire and bank fraud. Purdy was convicted on 13 counts of mail, wire and bank fraud, as well as making false statements to a financial institution.
These guys should, one can only hope, spend many years in the prison. This isn’t about discounts, fees or kickbacks, not that those are acceptable, but flat out swindling at the cost of missed sales revenues with your and my livelihood.
According to The Wall Street Journal, spokesman for the convicted Shah said they’d work to “overturn the result.” Agarwal’s representative said they were reviewing the decision, and Purdy’s attorney said, “he was disappointed by the verdict”.
In 2019, Outcome and the Department of Justice reached a $70 million settlement with an admission of guilt, that former executives and employees sold falsified advertising inventory for 5 straight years, from 2012 to 2017. The company merged with patient engagement and education platform PatientPoint in 2021.
Read more here —Former Outcome Health Executives Found Guilty of Fraud – WSJ