Final result Well being’s Rishi Shah and feds struggle over former CEO’s property


Prosecutors mentioned in a submitting that they need “to restrain Shah’s property and thereby forestall him from frittering away the cash on playing, yachts and jets.” 

In courtroom filings this week, prosecutors famous that Shah tried to wire $100,000 every on Might 23 to accounts at sports-betting websites Barstool Sportsbook and DraftKings, which had been rejected. A DraftKings e mail included in authorities filings mentioned: “We’re returning the financial institution wire resulting from these causes: Unfavorable information and shutting account.”

The filings are the most recent examples of the contentious battle between Shah and federal prosecutors over his property, which has been happening for 3 years. 

Now that Shah and fellow Final result Well being executives Shradha Agarwal and Brad Purdy have been convicted of defrauding clients and buyers, prosecutors are asking U.S. District Choose Thomas Durkin to permit them to grab Shah’s property that had been frozen earlier than trial.

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The federal government is seeking to forfeit hundreds of thousands in money and investments belonging to Shah that it says could be traced to the fraud during which the corporate overbilled pharmaceutical advertisers, inflating the corporate’s monetary outcomes because it raised practically a half-billion {dollars} in funding from buyers resembling Goldman Sachs and Google.

Prosecutors additionally need authority to garnish different property that may very well be essential to cowl restitution they’ll search when Shah is sentenced within the fall. He is dealing with as much as 30 years in jail.

Shah’s attorneys are combating prosecutors’ efforts, arguing that the federal government froze property that weren’t associated to fraudulent exercise concerned within the case. Additionally they contend that the federal government can’t search forfeiture of any property till remaining judgment, or sentencing, is full.

“A legal defendant has a constitutional proper to make use of property derived from noncriminal sources to help his protection,” they mentioned in a submitting. “The federal government has denied him that proper for greater than three years.”

Prosecutors aren’t shopping for it. “Contemplating that Shah had entry to greater than $20 million in unrestrained property, together with greater than $11 million in a checking account 5 months earlier than trial, and contemplating Shah’s spending habits and high-end way of life over the previous 5 years, he can’t credibly declare he wanted the non-traceable portion of the restrained property — which amounted to roughly $4.9 million on the time of indictment — for legal professional’s charges.”

This story first appeared in Crain’s Chicago Enterprise.

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