Outcome Health to pay $70 million to settle U.S.
doctors' office ad fraud probe
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[October 31, 2019]
By Jonathan Stempel
(Reuters) - Outcome Health, which streams
pharmaceutical ads on televisions and computer tablets it installs in
doctors' offices, agreed to pay $70 million to end a U.S. criminal probe
into whether it defrauded clients by selling ad inventory it did not
have.
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In a statement on Wednesday, the U.S. Department of Justice said
Chicago-based Outcome entered a three-year non-prosecution agreement
where it admitted that former executives and employees overbilled
clients, which were mostly pharmaceutical companies, in a scheme
that ran from 2012 to 2017.
The Justice Department also said Outcome admitted to overstating
revenue, enabling it to raise $972.5 million of equity and debt
financing, including from affiliates of Goldman Sachs Group Inc,
Google parent Alphabet Inc and Pritzker Group, and obtain a $5
billion valuation by 2017.
![](http://archives.lincolndailynews.com/2019/Oct/31/images/ads/current/pestcontrol_bch_termites.png)
"Outcome Health deceived its lenders and investors, and overbilled
its clients, by fraudulently misrepresenting both the quality and
quantity of its advertising services and concealing those
misrepresentations from auditors," Principal Deputy Assistant
Attorney General John Cronan said in a statement.
The Justice Department said the settlement reflected Outcome's
cooperation and "extensive remedial measures," and that the former
executives and employees involved in the wrongdoing had left the
company.
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![](http://archives.lincolndailynews.com/2019/Oct/31/images/ads/current/collision_lda_PPP_2018.png)
It also said $65.5 million of the $70 million has already been paid
out, and that Outcome is not required to compensate its lending and
investing victims, though many lenders and investors are now among
its owners.
Outcome said in May it had sold a majority stake to private equity
firm Littlejohn & Co as part of a recapitalization.
Matt McNally, Outcome's chief executive since June 2018, said the
company was pleased to settle.
"Over the past two years, Outcome Health has focused on doing right
by our customers," he said in a statement. "We are a completely new
company."
(Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot)
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