US attorneys have filed criminal charges accusing Outcome Health leaders of supervising clients and fraudulently obtaining approximately $1 billion in funds, including from major investors.
The federal authorities charged three former Indian-origin executives of a Chicago-based health tech start-up for their suspected involvement in a fraud scheme that involved falsifying the financial performance of the company to raise nearly $1 billion in debt and private equity.
Outcome Health co-founders Rishi Shah, 33, and Shradha Aggarwal, 34, and former executive Ashik Desai, 26, are among six people charged with fraud “that targeted customers, borrowers, and shareholders of the business,” the U.S. Department of Justice said Monday.
Former executives and employees of Outcome knowingly misled creditors, shareholders, and their own auditors by falsely representing additional profit revenue, “said John P Cronan, Senior Deputy Assistant Attorney General of the Criminal Division of the Justice Department.
The charges announced today show that lies and deception can not serve as the basis for any company, including start-ups, to falsely increase revenue for additional capital and private gain, “said Cronan.
Shah and Agarwal cofounded and owned the health care advertising company when the alleged fraud took place in 2015 and 2016.
Between 2011 to 2017, according to the Department of Justice, Outcome’s former executives and workers sold tens of millions of dollars in non-existent commercial stock.
This allegedly resulted in inflated financial statements that were used by former executives in 2016 and 2017 to collect nearly USD 1 billion in debt and equity funding, he said in a statement.
The deceit allegedly committed by the defendants tricked clients into paying for ads they failed to deliver and helped to falsely inflate the value of Outcome Health, “said Assistant U.S. Attorney Brian Hayes, Chief of the Northern District of Illinois Criminal Division.
“These allegations demonstrate that the FBI and its partners will keep companies accountable for their wrongdoing,” said the FBI’s Chicago Field Office’s Deputy Special Agent in Charge Larry L Lapp.
According to Inspector General Jay N Lerner of the Federal Deposit Insurance Corporation’s Office of Inspector General (FDIC-OIG), the accused were charged with allegedly over-inflating the company’s revenue figures to fraudulently obtain bank loans.
Shah, Agarwal, and Purdy are charged with different charges of mail fraud, wire fraud, and bank fraud. Purdy is also charged with one count of a financial institution’s false statements, and Shah is also charged with two counts of criminal proceeds transactions. Desai, the statement said, is charged with one count of wire fraud.
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Anil Goel, OYO Hotels CTO, believes that technology allows the hospitality company to map end-to-end customer experience from search and reservation to service delivery and check-out.
Technology is at the core of the OYO Hotels & Homes hospitality start-up. Anil Goel, Chief Technology Officer, is responsible for driving the technology strategy. He believes that technology allows OYO to map end-to-end customer experience from the process of searching and booking to service delivery and check-out.
He talked to Mint about how the company is taking advantage of new growth technologies.
How is OYO Hotels and Homes using technology?
Technology is central to the growth of OYO and is a competitive advantage for us in the hospitality industry worldwide. We provide our own property management system called OYO OS to hotels, which helps property managers manage all aspects of the property. We have built a number of in-house apps, such as the Co-OYO app, that allow asset owners to monitor progress and access information related to payments in one place. Asset owners can have full visibility on cash flows, business performance, pricing, customer reviews and recommendations through the Co-OYO app. The app includes advanced analytics that allow a deep dive into asset performance over time, an intuitive interface that is easy to navigate and make decisions about value-added services, performance enhancement by providing insights and easy-to-understand metrics and graphs that enable daily performance monitoring. There’s also Krypton, the mobile audit app from OYO that allows OYO managers to audit properties. Now, a single OYO manager with Krypton is able to manage the audit of more than 300 rooms while at the same time improving the guest experience.
How do you use Artificial Intelligence (AI) and Data Analytics, Machine Learning (ML)?
We use ML for dynamic pricing while helping with customer services are AI and NLP (Natural Language Processing). IoT (Internet of Things) is a large area for us where we are experimenting with smart switches and smart lighting to improve the guest experience significantly. This pilot allows us to decide ways to save energy, allow unassisted check-in with smart locks, as well as to determine pre-check-in guest room temperature and lighting preferences. Data science and analytics help us improve the guest experience at every step from a customer experience point of view. Via AI and machine learning, we look at various indicators from day-to-day, weather, place to local events, to be able to learn more and more about which sort of room a customer wants, and what the search results the customer is most likely to value. Data science and machine learning help us understand the behavior of our guests-both preferences and implicit behaviour, how they interact with our search results and app, and how they interact while staying in our hotels.
What about the new Facial Recognition technologies?
Here we are in the domain of exploration. Potentially, facial recognition could have great improvements in customer experience. Imagine a scenario in which visitors would sign in directly online through an app or internet and then walk straight into the room without even having to show the QR code or the device button. But at the same time, the privacy and security concerns need to be balanced. So everything we do will be completely allowed, with the option of opting in or opting out of the process. I see a big play in helping guests make the right choice for Augmented Reality and Virtual Reality. Imagine if your guests really feel like what staying in the hotel room would be like before they booked a hotel. We agree that the hospitality and real estate industries are poised to change technology. And we’re at the top of it.
How big is the team of your tech?
Globally, we have a team of 2100 plus engineers, primarily based in India and China, although in many other countries we have a smaller presence. We hire the top 1 percent of the world’s technology talent, which includes a combination of campus hiring and hiring engineers from other tech firms.
Fresh funds will help Paytm spread to the hinterland of India
In the next three years, Paytm plans to invest 10,000 crore to introduce financial inclusion to more underserved users in India.
One97 Communications Ltd, operating Paytm, raised $1 billion from new and existing investors, including the SoftBank Group of Japan and the Ant Financial of China, said a person familiar with the development.
The funds would help the digital payment firm to beef up its finances to make a deeper foray into the hinterland of India in the midst of intensifying competition from the PhonePe Pvt owned by Google Pay and Walmart Inc.
The fundraising boosted Paytm’s valuation to $16 billion, from the $15 billion it was listed at when some of its employees cashed out their shares in a secondary sale to undisclosed New York-based shareholders in August.
Paytm said it raised a fresh round of equity from existing shareholders like Ant Financial, an Alibaba Group Holding Ltd affiliate, and SoftBank Vision Fund on Sunday. New investors, including T, also joined them. Associates of Rowe Price, Inc. The round was also attended by Discovery Capital, an established Paytm investor. Nevertheless, the company did not reveal the amount of funds raised.
Paytm founder Vijay Shekhar Sharma said the fresh investments will be used to grow the payments and financial services business.
Over the next three years, Paytm plans to invest around 10,000 crore to bring financial inclusion to more underserved users throughout India.
Paytm pioneered acceptance of low-cost digital payments in India using its QR-code technology in local shops and retailers in its first phase of growth. Paytm, currently serving merchants in over 2,000 towns and cities across 650 districts, aims to provide rural India with low-cost mobile financial services that are enabled. The organization will invest and help millions of rural Indians through job creation towards self-sustainability, “he said.
Since the beginning of this year, Paytm has been in talks to raise funds in the face of rising losses, increasing competition in the digital payments market, and no clear source of revenue growth to monetize its customer base.
In India, digital payments have risen to 22.4 transactions per person more than five times since 2015 in the year ended March 31, Reserve Bank of India shows figures.
According to a report by NITI Aayog last year, the market is expected to expand to $1 trillion by 2023.
In digital payments, Paytm is involved in a market share fight with Google Pay and PhonePe. The digital payment firm has fallen behind its two competitors in UPI payments once the clear market leader.
Paytm is trying to become a comprehensive, margin-enhancing financial services firm, but has struggled to expand its bank and other businesses. Japan’s SoftBank has pressed Paytm to speed up its spending cuts and find new revenue streams, according to reports.
Japan’s SoftBank has been pushing Paytm to speed up its spending cuts and find new revenue streams, according to reports.