GOOGL Alphabet Inc

By Rolfe Winkler 

Federal prosecutors filed criminal charges against former executives of once-highflying startup Outcome Health, alleging they defrauded pharmaceutical companies as well as investors including Goldman Sachs Group Inc., Alphabet Inc. and an investment firm then headed by Illinois governor J.B. Pritzker.

The indictments of the company's former chief executive, Rishi Shah, as well as ex-president Shradha Agarwal and previous finance chief Brad Purdy, conclude a two-year investigation by the Justice Department. The case was sparked by a 2017 Wall Street Journal report that the company had misled some customers with inflated data and fake reports.

In the indictment unsealed Monday, the three executives were each charged with multiple counts of mail and wire fraud and one count of bank fraud. Mr. Shah, 33 years old, also faces two counts of money laundering and Mr. Purdy, 30, one count of making a false statement to a bank. Each faces potential prison time if convicted.

The Securities and Exchange Commission on Monday also sued the three former executives, alleging they committed civil securities fraud.

The SEC's lawsuit seeks a court order demanding Mr. Shah and Ms. Agarwal return any proceeds illegally raised from investors. It also seeks civil fines against all four defendants. The lawsuit additionally asks the court to bar Messrs. Shah and Purdy and Ms. Agarwal from serving as an officer or director of a public company.

A lawyer for Mr. Shah said his client denies the charges brought by Justice Department and SEC and "looks forward to his day in court and the opportunity to clear his name."

Ms. Agarwal's attorney said her client denies the allegations made by the Justice Department and the SEC. "Shradha never committed fraud and never participated in any conspiracy. To the contrary, Shradha was committed to transparency and integrity at Outcome Health. She will fight to protect her good name in court."

The U.S. Attorney's Office in Chicago, as well as a lawyer for Mr. Purdy, didn't immediately respond to a request for comment.

--Dave Michaels contributed to this article.

Write to Rolfe Winkler at rolfe.winkler@wsj.com

(END) Dow Jones Newswires

November 25, 2019 13:09 ET (18:09 GMT)

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