The United States Court of Appeals for the Seventh Circuit upheld the convictions of Rishi Shah and Shradha Agarwal, the founders of Outcome Health, on August 6, 2026. The court's decision came after the defendants appealed their convictions, which stemmed from a multi-million-dollar fraud scheme. This ruling affects the defendants' legal standing and reinforces the government's ability to freeze assets linked to alleged criminal activity.
Shah and Agarwal were indicted in 2019 for orchestrating a fraud scheme through their company, which misled clients and investors about the company's performance. Following an 11-week trial, a jury convicted both on multiple counts of fraud and money laundering. Their appeal primarily contested a pretrial protective order that froze assets they claimed were essential for retaining their legal counsel.
Rishi Shah founded Outcome Health in 2006, a healthcare technology company that provided advertising services in medical offices. Shradha Agarwal joined the company shortly after and rose to the position of President. The company grew rapidly, but by 2017, it faced allegations of fraud that led to federal charges. The indictment accused Shah and Agarwal of defrauding clients by overstating the availability of advertising space and inflating performance metrics. These actions misled clients into signing contracts based on false information.
In October 2017, reports surfaced about the fraudulent practices of Outcome Health, leading to a civil settlement in which Shah and Agarwal agreed to resign and pay significant sums to investors. The federal indictment followed in November 2019, which included allegations of asset forfeiture linked to the fraud. The government sought a protective order to freeze assets believed to be traceable to the criminal activity, which included tens of millions of dollars.
The defendants argued that the protective order was overly broad and infringed upon their Sixth Amendment right to counsel by limiting their access to funds necessary to pay their attorneys. They also claimed violations of their Fifth Amendment due process rights due to misleading statements made to the grand jury. The district court, however, found that Shah and Agarwal had sufficient information during discovery to challenge the asset freeze before the trial began and ultimately denied their claims.
The Seventh Circuit, led by Judge Scudder, affirmed the district court's ruling. The court stated, "While what transpired with the pretrial asset freeze is complicated and troubling, we see no error in the district court's finding that Shah and Agarwal received sufficient information during discovery to identify and challenge the over-restraint well before trial." The court concluded that the defendants failed to demonstrate that the asset freeze effectively denied them the right to their chosen counsel.
This ruling has significant implications for future cases involving asset freezes in criminal proceedings. It reinforces the government's ability to impose protective orders to ensure that assets linked to criminal activity are preserved for potential forfeiture. The court's decision also clarifies the standards for demonstrating a violation of the right to counsel of choice, indicating that defendants must show that asset restraints significantly hindered their ability to retain preferred legal representation.
Moving forward, Shah and Agarwal's legal options may be limited. They can seek further appeal, but the Seventh Circuit's ruling sets a strong precedent regarding the balance between asset restraint and the right to counsel. The case highlights the complexities of financial management in criminal cases and the importance of timely challenges to asset freezes.