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Desai, who spent last week testifying for federal prosecutors, now is on the hot seat, being cross-examined by attorneys for Shah, Outcome Health co-founder Shradha Agarwal and former Chief Operating Officer Brad Purdy, who are on trial for fraud.
John Hueston, a former Enron prosecutor who represents Shah, has portrayed Desai as a 20-something wunderkind who went from intern to senior executive overnight, committed fraud by lying to customers and panicked when it was discovered, then cut a deal with federal prosecutors.
Related: Star witness testifies against Outcome Health founders in fraud trial
Desai is key to the government’s effort to prove Shah, Agarwal and Purdy knowingly defrauded the drug companies that advertised on Outcome Health’s network of TV screens and tablet computers in doctors’ offices.
Like most witnesses who cut plea deals, Desai’s involvement in the alleged crime presents credibility challenges. Desai pleaded guilty to one count of fraud and agreed to testify in exchange for a recommendation by prosecutors for a maximum sentence of 10 years.
In May 2017, Outcome Health made headlines by raising $488 million in deal that valued it at more than $5 billion, one of the highest amounts ever for a Chicago startup. Things soon began to unravel after allegations by The Wall Street Journal that the company misled customers and investors. Desai, who was named in the article, was put on administrative leave before the story broke. He spoke to the FBI for the first time a year later.
“You could go to prison for a long time,” Hueston said, estimating the maximum sentence at about 25 years. “The only way out for you was to make a case against others.”
Desai, who received his MBA from the Wharton School of Business while waiting for the case to go to trial, challenged Hueston, saying, “No, it was to tell the truth.”
Hueston attempted to portray Desai as the ringleader of a group of analysts who inflated numbers and otherwise misled advertisers at his direction because he wanted to advance his own career rather than tell the truth to his bosses and risk disappointing them.
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