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Chicago’s Outcome resolves federal criminal fraud investigation

| Nov 13, 2019 | Federal Crimes |

There are several ways in which federal criminal investigations can come to an end. Many times the investigations end without any charges being filed, while others end with an indictment. However, the recent resolution of a federal criminal fraud investigation in Illinois illustrates another possibility.

Outcome Health, a Chicago-based digital health care ad company and its defense attorneys negotiated a settlement in which the firm agreed to pay $70 million to resolve a Department of Justice investigation. The company acknowledges that from 2012 to 2017 former employees fraudulently sold advertisements to customers.

In the non-prosecution agreement, investigators said former Outcome executives and employees overbilled clients by more than $31 million in 2015 and 2016.

Outcome, formerly known as ContextMedia, installs televisions and tablets in doctors’ offices and sells ads targeting patients to pharmaceutical companies.

According to FierceHealthcare, questions raised by media reports and the federal fraud investigation resulted in about one-third of Outcome’s employees accepting buyouts to leave the firm.

Wall Street Journal reported in 2017 that to try to boost sales, Outcome inflated data to pharmaceutical firms. The firm was then sued by investors who wanted to have approximately $500 million returned. The suit was dropped after Outcome’s founders stepped down.

Now that the DOJ settlement is final, Outcome released a statement that it has overhaul its “compliance and campaign-reporting policies” as well as “internal controls to improve the reliability of reporting.”

More than $65 million of the settlement has already been distributed in payments and in-kind services, the criminal division for the Northern District of Illinois said in a statement about the “appropriate resolution for the corporate entity given the misconduct of executives and employees acting on its behalf.”

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