A star witness in the criminal fraud trial of three former Outcome Health leaders spent Tuesday describing how he and his bosses allegedly deceived clients — testifying against people he said he once looked up to as an “older brother and older sister. ” Ashik Desai began his first full day of testimony in Chicago on Tuesday in the federal trial of former Outcome CEO Rishi Shah, former President Shradha Agarwal and former Chief Operating Officer and Chief Financial Officer Brad Purdy. Outcome was once a darling of Chicago’s tech scene, at one point rising to a valuation of about $5. 5 billion. The company placed screens and tablets in doctors’ offices and waiting rooms that ran educational content and pharmaceutical ads. Advertisement But federal prosecutors allege that behind the company’s success was a $1 billion fraud scheme led by Shah, Agarwal and Purdy. They allege that the three lied about how many doctors’ offices had screens and tablets running their content and then used those exaggerated numbers to overcharge drug companies for advertising and inflate revenue figures used to get loans and raise money from investors. All three have pleaded not guilty to the charges, which include mail fraud, wire fraud and bank fraud. Some of the counts carry sentences of up to 30 years in prison. Advertisement Desai, who testified Tuesday, was Outcome’s young, executive vice president of business growth and analytics. He was put on leave in 2017 shortly before an explosive Wall Street Journal article revealed the alleged fraud at the company. A cascade of lawsuits and the eventual criminal charges against Outcome’s leaders followed. Desai has pleaded guilty to one count of wire fraud, and as part of an agreement with the government, could get a reduced prison sentence for testifying in the trial of Shah, Agarwal and Purdy. Desai’s testimony is expected to be pivotal in the case, with defense attorneys saying he was a mastermind who duped his innocent bosses and prosecutors saying he was merely a pawn. On Tuesday, prosecutors prompted him to explain how he and the others allegedly fudged numbers and lied to clients. “We were selling offices and screens and devices we did not have,” Desai said Tuesday. “Once we had sold more inventory than we’d had, we were billing clients for that excess inventory even though it wasn’t there. . . . This was a pervasive thing throughout the business. ” Desai started at the company in 2013, deciding to pursue a career there rather than attend medical school, he said. He was only 20 years old when he joined the company, which was called ContextMedia, at the time. Desai said it became apparent to him within a month of joining the company that it was underdelivering inventory — screens on which advertising would run — to drug company clients. He said Tuesday that Shah taught him what to include on lists of inventory given to clients. Prosecutors also showed the jury an email from 2013, from about a week after Desai started working at ContextMedia, in which Agarwal told Desai and others not to share certain data with salespeople because, “I’ve noticed their confidence level in our data change dramatically when presenting to clients if they believe it’s accurate vs made-up. ” Desai also described an incident in 2013 when one of ContextMedia’s major clients, drug company Boehringer Ingelheim, wanted to do its own research study on its advertising with ContextMedia. The problem, he said, was that ContextMedia had told the drug company that its advertising for a particular drug was running in more than 1,800 offices when it was actually running in about 600, Desai alleged. Advertisement Prosecutors showed the jury a series of emails between Desai, Agarwal and Shah about how to handle the situation. In one email, Agarwal wrote, “Reminder: the biggest issue here is that the list they have of 1,819 matches isn’t the true list (not even 1/3 of it was installed at the time). ” In another email, Shah called the situation “a big deal” and said if the drug company insisted on moving forward with the study, ContextMedia could “go to a weighted average understanding,” meaning it would tell the drug company that it was trying to reach a monthly average of a certain number of screens over time, rather than the full number each month, Desai alleged. The defense is expected to allege during the trial that Outcome operated on a weighted average system, meaning it was understood that Outcome might initially underdeliver on a contract, but because the company was growing so rapidly, it would overdeliver later on, so that, on average, it would have played ads on the required number of screens over the course of a contract. Desai said Tuesday, however, that while Outcome had a few weighted average campaigns, it was “not the typical campaign. ” Desai also alleged that there were four months in 2013 in which ContextMedia ran no advertising for the Boehringer Ingelheim campaign because of a mistake, yet continued to charge the company nearly $220,000 a month. ContextMedia never told Boehringer Ingelheim that it had been charged for months in which no advertising for the drug ran, Desai alleged. He also alleged Tuesday that, in a different campaign, ContextMedia cherry picked data used to create a return-on-investment report for a client that made the return-on-investment look better than it actually was. Advertisement When asked why he committed fraud, Desai answered that he had believed in the company’s mission. “I had given up a lot to come and join this company,” Desai said. “I always thought we were going to get there. . . . I believed it was all going to kind of work itself out. ” He also testified that Shah told him it was common for startup tech companies to have “messy kitchens” when they were starting out. He said he looked up to Shah, and tried to emulate him, with co-workers even calling him “mini Rishi. ” Meanwhile, defense attorneys have said their clients’ main mistake was trusting Desai. They say he is responsible for the fraud. Defense attorneys are expected to begin cross-examining Desai in the coming days. Advertisement Desai is expected to continue testifying for the next couple of weeks in the trial, which began Jan. 30 and is expected to last for as long as 14 weeks. Outcome and its former leaders have spent years embroiled in legal actions. Outcome settled a lawsuit by investors in early 2018, after investors alleged the company misled advertisers and investors about the company’s performance. At that point, Shah and Agarwal stepped down from daily operations of the company, and, six months later, resigned from their board positions. In 2019, Outcome, as a company, agreed to pay $70 million to pharmaceutical companies to resolve a federal fraud investigation. As part of the agreement, Outcome admitted that from 2012 to 2017, former executives and employees “perpetrated a scheme to defraud its clients — most of which were pharmaceutical companies — by selling advertising inventory that it did not have,” the Justice Department said in a news release. In March 2021, Outcome combined with company PatientPoint to create a new firm called PatientPoint Health Technologies. Advertisement lschencker@chicagotribune. com.