Tech CEO admits role in tricking Qualcomm into $150M takeover

Tech CEO admits role in tricking Qualcomm into $150M takeover

The former chief executive of a company that was sold to Qualcomm for more than $150 million has pleaded guilty to one count of money laundering relating to a $1.5 million transaction involving proceeds from the deal.

Sanjiv Taneja was CEO at startup Abreezio, for which Qualcomm agreed to pay roughly $180 million, $150 million of which was paid in cash in October 2015.

However, prosecutors claimed in the original indictment that the company’s supposedly proprietary technology had allegedly been developed and provisionally patented by one of the other defendants, Qualcomm’s now ex-vice president of research and development, Karim Arabi, while he was employed by the tech giant, as The Register reported last year.

In addition to Arabi and Taneja, the defendants include Ali Akbar Shokouhi, another former vice president at Qualcomm, and Sheida Alan, a Canadian graduate student. Alan is understood to be Arabi’s younger sister, and had been listed as the purported inventor of Abreezio’s technology in company documents. Alan was said to be awaiting extradition proceedings from Canada. Both Arabi and Shokouhi pleaded not guilty last year.

Prosecutors allege Taneja and the other defendants set up Abreezio but hid Arabi’s involvement with it while they marketed its technology to Qualcomm, resulting in its eventual move to acquire Abreezio.

The intellectual property in question is said to have included electronic design and automation (EDA) technology focused on power, performance and area (PPA) optimization in advanced technology nodes – in other words, tools to optimize circuit layouts in chip designs.

But as is often the norm in US companies, Arabi’s employment agreements are understood to have included the proviso that inventions he developed during his tenure would become the property of his employer, Qualcomm.

Taneja pleaded guilty to the laundering charge in court last week, according to the US Attorney’s Office for the Southern District of California. In his plea agreement [PDF], Taneja admitted that he and his co-defendants had plotted to hide Arabi’s involvement in Abreezio, allowing the company to claim it was an “angel-funded” startup.

The agreement did not appear to include any of the wire fraud charges in the original indictment.

In his plea deal, Taneja also admitted to allegations he’d obtained details regarding the capabilities of Qualcomm’s existing technology from Arabi to try to improve Abreezio’s marketing pitch, and that he referred to Arabi by a different name when contacting him to conceal the latter’s involvement in the company.

Furthermore, the Attorney’s Office states Taneja admitted that Arabi directed him to delete emails relating to the scheme once Qualcomm started investigating the Abreezio transaction. Taneja was apparently able to recover the emails later.

Tyler Hatcher, Special Agent in Charge for IRS Criminal Investigation, Los Angeles field office, said in a statement: “Taneja was part of an elaborate conspiracy to steal tens of millions of dollars from a major technology company and a complex scheme to launder the proceeds.

“IRS Criminal Investigation special agents are experts at following the money through complex transactions and international movements, and we are committed to continued collaboration with our law enforcement partners to identify and bring to justice those who attempt to defraud people, businesses or both.”

Qualcomm was not immediately available to comment. ®

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