Case: 1:19-cr-00864 Document #: 528-1 Filed: 09/18/23 Page 1 of 8 PageID #:6464
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`UNITED STATES OF AMERICA
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`vs.
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`RISHI SHAH, SHRADHA
`AGARWAL, and BRAD PURDY
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` Case No. 19 CR 864
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`Hon. Thomas M. Durkin
`United States District Judge
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`SUPPLEMENTAL DECLARATION OF SHRADHA AGARWAL
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`My name is Shradha Agarwal. I am over the age of eighteen and make the
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`following declaration to accompany the reply memorandum in support of my motion
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`for new trial. In particular, I submit this declaration in response to certain arguments
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`the government made in its opposition to my motion.
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`1.
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`On July 23, 2018, I retained McGuire Woods to represent me in
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`connection with the federal government investigation into Outcome Health. The
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`retainer agreement is attached as Exhibit 1. Under that agreement, the representation
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`was divided into two parts: the pre-indictment, investigatory phase ("Phase One")
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`and the post-indictment phase, including any trial and sentencing ("Phase Two").
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`The agreement capped the fees for Phase One at $3 million and for Phase Two at $4
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`million. At the outset of Phase One, I was required to provide $3 million, plus
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`$200,000 for expenses. At the outset of Phase Two, I was required to provide $4
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`million. McGuire Woods was to place these payments in a trust account and bill
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`1
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`UNITED STATES OF AMERICA
`
`vs.
`
`RISHI SHAH, SHRADHA
`AGARWAL, and BRAD PURDY
`
`
`
` Case No. 19 CR 864
`
`Hon. Thomas M. Durkin
`United States District Judge
`
`
`
`
`
`SUPPLEMENTAL DECLARATION OF SHRADHA AGARWAL
`
`My name is Shradha Agarwal. I am over the age of eighteen and make the
`
`following declaration to accompany the reply memorandum in support of my motion
`
`for new trial. In particular, I submit this declaration in response to certain arguments
`
`the government made in its opposition to my motion.
`
`1.
`
`On July 23, 2018, I retained McGuire Woods to represent me in
`
`connection with the federal government investigation into Outcome Health. The
`
`retainer agreement is attached as Exhibit 1. Under that agreement, the representation
`
`was divided into two parts: the pre-indictment, investigatory phase ("Phase One")
`
`and the post-indictment phase, including any trial and sentencing ("Phase Two").
`
`The agreement capped the fees for Phase One at $3 million and for Phase Two at $4
`
`million. At the outset of Phase One, I was required to provide $3 million, plus
`
`$200,000 for expenses. At the outset of Phase Two, I was required to provide $4
`
`million. McGuire Woods was to place these payments in a trust account and bill
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`1
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`Case: 1:19-cr-00864 Document #: 528-1 Filed: 09/18/23 Page 2 of 8 PageID #:6465
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`against them until the fee cap of $7 million was reached. The retainer agreement
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`provided that if expenses exceeded $175,000, the firm had various options, including
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`"requir[ing] an additional retainer." Exhibit 1 at 3.
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`2.
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`In accordance with the McGuire Woods retainer agreement, I provided
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`the firm with $3.2 million in 2018--$3 million for attorneys' fees and $200,000 for
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`expenses.
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`3.
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`On November 14, 2019, Ashik Desai was charged in this Court by
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`information. At that time, McGuire Woods requested the $4 million Phase Two
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`payment. Within a few days, Rishi Shah requested that the firm he had retained,
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`Quinn Emanuel, transfer $2.5 million to McGuire Woods in partial satisfaction of
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`the Phase Two payment, and the transfer was made.
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`4.
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`Following the $2.5 million transfer from Quinn Emanuel to McGuire
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`Woods, I had paid McGuire Woods a total of $5.7 million--the $3 million Phase One
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`payment, $200,000 for expenses, and $2.5 million of the $4 million Phase Two
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`payment. I still owed McGuire Woods $1.5 million for the Phase Two payment. I
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`also understood that McGuire Woods would require an additional retainer for post-
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`indictment expenses, which the firm estimated would run somewhere between
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`$500,000 and $1 million. Although I do not recall that we had agreed on the specific
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`amount I would need to provide for the additional expense retainer, I understood that
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`the firm would require at least $500,000.
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`2
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`Case: 1:19-cr-00864 Document #: 528-1 Filed: 09/18/23 Page 3 of 8 PageID #:6466
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`5.
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`On or soon after November 25, 2019, I learned that the Court had
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`entered a protective order that had the effect of freezing the funds then held in the
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`McGuire Woods trust account. Those funds amounted to approximately $3.8
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`million.
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`6.
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`On December 13, 2019, McGuire Woods moved to enter a limited
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`appearance on my behalf. Docs. 54, 55. The firm sought to represent me solely for
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`my arraignment and to file and litigate a motion to amend the Court's November 25,
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`2019 protective order and vacate a seizure order. The Court granted McGuire
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`Woods' motion to enter a limited appearance. Doc. 65.
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`7.
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`The motion to amend the protective order and vacate the seizure
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`warrant was filed on January 3, 2020. Doc. 75-1. The Court denied the motion on
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`April 8, 2020. Doc. 108. By minute order on May 22, 2020, the Court granted me
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`until June 30, 2020 to retain counsel, but added that "[n]o further extensions will
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`likely be granted, as a number of important scheduling matters are being delayed
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`because of this." Doc. 112.
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`8.
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`Following the Court's denial of the motion to amend the protective
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`order, McGuire Woods declined to alter the terms of the July 2018 retainer
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`agreement that required a $4 million Phase Two payment and an additional expense
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`retainer before the firm would enter an appearance on my behalf. At that point,
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`therefore, I understood that I needed at least $5.8 million to keep McGuire Woods
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`3
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`Case: 1:19-cr-00864 Document #: 528-1 Filed: 09/18/23 Page 4 of 8 PageID #:6467
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`as my counsel: the $1.5 million that I still owed after the $2.5 million transfer from
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`Quinn Emanuel in November 2019, plus the $3.8 million in the McGuire Woods
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`trust account that the Court had frozen, plus the additional amount the firm would
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`require as a retainer for anticipated expenses, which I understood would be at least
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`$500,000. I had until June 30, 2020 to either pay McGuire Woods the approximately
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`$5.8 million or find new counsel.
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`9.
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`I understood that Mr. Shah had access to approximately $4 million in
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`unfrozen funds earmarked for legal fees. At some point before the June 30, 2020
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`deadline, Mr. Shah offered to make a portion of this money available to me for my
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`counsel. As I recall, the amount ultimately made available to me by the June 30
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`deadline was $2.25 million. That left more than $3 million for fees plus at least
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`$500,000 for the expense retainer that I needed by the deadline if I were to keep
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`McGuire Woods as my counsel.
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`10. As set forth in my February 14, 2020 declaration (Doc. 93-2), I had at
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`that time approximately $3.1 million in liquid or readily liquidated assets, a portion
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`of which I held jointly with my husband. (Pershing, which held about $215,000 of
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`those assets in a joint brokerage account, said that it was holding them as potentially
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`forfeitable, even though they were not covered by the Court's protective order, and
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`would release them only by court order. Doc. 93-2 at 5, ¶ 6.g. I am assuming here
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`that those funds could have been made available to pay McGuire Woods, although
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`4
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`Case: 1:19-cr-00864 Document #: 528-1 Filed: 09/18/23 Page 5 of 8 PageID #:6468
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`that is not at all clear.) Even if I had turned all of my liquid and readily liquidated
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`assets over to McGuire Woods, I would still have been hundreds of thousands of
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`dollars short of what the firm required to enter its appearance for me in Phase Two.
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`And, without employment and under indictment, I would have left myself without
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`funds for the expenses described in ¶¶ 14 and 15 below.
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`11.
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`I owned jointly with my husband a condominium in Chicago and a
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`residence in Austin. My husband and I had pledged the condominium as security
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`for my $10,000,000 bond. Doc. 69. Among other promises in connection with the
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`pledge, we had promised to "take no action which could encumber the real property
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`or diminish [our] interest therein, including any effort to sell or otherwise convey
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`the property without leave of Court." Doc. 69 at 4, ¶ 12. I thus understood that I
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`could not attempt to borrow against or sell the condominium to raise money for my
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`legal fees.
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`12. At some point after the Court's April 8, 2020 order, I approached a bank
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`at which I was opening an account, the Randolph-Brooks Federal Credit Union,
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`about the possibility of borrowing against the Austin property. I was told that the
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`credit union would not consider giving me a home equity loan, because I was
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`unemployed and under indictment. I did not attempt to sell the Austin property,
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`because I did not think it possible to find a buyer and complete the transaction by
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`the June 30, 2020 deadline for retaining counsel.
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`5
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`Case: 1:19-cr-00864 Document #: 528-1 Filed: 09/18/23 Page 6 of 8 PageID #:6469
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`13.
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`I also owned an apartment in India for my mother's use. I did not
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`explore the possibility of selling or borrowing against that apartment, because I
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`understood the process would likely take many months to complete and would at
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`some point require my presence in India, which my conditions of release would not
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`permit.
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`14. To further complicate raising money for legal fees, my tax preparer had
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`told me that I would likely owe about $2 million in 2019 taxes. Doc. 93-2 at 8, ¶ 12
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`(February 14, 2020 declaration noting this likely tax liability). As it turned out, my
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`2019 tax return reflected a total tax of $1,904,511 and tax owed, after payments and
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`credits, of $1,631,977. I made an initial payment of $250,000 on July 15, 2020. The
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`payment receipt is attached as Exhibit 2. After this payment, and with the addition
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`of penalties and interest, I owed $1,431,445.02. Exhibit 3. In April 2021, the IRS
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`placed a tax lien on all of my property, including the Austin residence my husband
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`and I owned. The lien notice is attached as Exhibit 4. I made a series of payments
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`in 2021 and ultimately satisfied the tax liability, which included additional penalties
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`and interest. The payment receipts are attached as Exhibit 5.
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`15.
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`In addition to this 2019 tax liability, I was responsible for my mother's
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`living and medical expenses. Doc. 93-2 at 6-7, ¶¶ 10 and 11. My husband and I also
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`had to pay our own living expenses. Id. at 6, ¶ 9.
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`6
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`Case: 1:19-cr-00864 Document #: 528-1 Filed: 09/18/23 Page 7 of 8 PageID #:6470
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`16. When it became apparent that I would not be able to obtain the money
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`necessary to keep McGuire Woods as my counsel, I undertook a search for new
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`counsel. The search was made difficult by several factors, including my limited
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`funds, conflicts of interest, complications from the pandemic, and other
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`circumstances. See Doc. 111 at 2-4 (May 22, 2020 status report describing my
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`efforts to find new counsel). On June 29, 2020 I retained Blegen & Garvey, and on
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`June 30, the Court's deadline, I retained Larson O'Brien LLP. McGuire Woods then
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`withdrew as my counsel. Docs. 114, 129.
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`17. The Larson O'Brien LLP retainer agreement is attached as Exhibit 6.
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`Under that agreement, the firm received a flat fee of $1.5 million for legal services
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`through trial and a cost retainer of $500,000, with the full amount of $2 million due
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`before the firm began its representation. The Blegen & Garvey retainer agreement
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`is attached as Exhibit 7. Under that agreement, the firm received a flat fee requiring
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`an initial payment of $250,000, with an additional payment required in the future.
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`Thus, the total amount needed for the two firms to enter their appearances by the
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`June 30, 2020 deadline was $2,250,000, well over $1 million less than I would have
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`needed to keep McGuire Woods.
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`18.
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`If the funds that were improperly frozen had been available to me
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`before June 30, 2020, I would have used those funds, combined with the funds Mr.
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`Shah made available and, if necessary, with my own funds, to keep McGuire Woods
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`7
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`Case: 1:19-cr-00864 Document #: 528-1 Filed: 09/18/23 Page 8 of 8 PageID #:6471
`Case: 1:19-cr-00864 Document#: 528-1 Filed: 09/18/23 Page 8 of 8 PagelD #:6471
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`as my counsel. McGuire Woods, with which I had workedclosely since July 2018,
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`was my counsel of choice.
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`I declare under penalty of perjury that the foregoing is true and correct.
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`Executed this 18th day of September 2023.
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`()
`,
`f)
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`Shradha Agarwal
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