SAN DIEGO (CNS) - A former vice president of research and development at Qualcomm who was convicted of scheming to defraud the San Diego tech giant out of $180 million was sentenced Tuesday to four years in prison.
Karim Arabi, 59, was found guilty of hiding his role in the invention of a new microchip technology, as well as his part in a start-up company that sold the technology to Qualcomm.
Prosecutors said Arabi's employment agreement held that any inventions he created would belong to Qualcomm, while Arabi's attorneys have argued that provision in his employment agreement was not enforceable under California law.
The technology sold to Qualcomm was purportedly invented by Arabi's sister, Sheida Alan, but prosecutors alleged Arabi was the true inventor and also impersonated his sister in communications related to the start-up company behind the technology -- Abreezio.
When Abreezio had to file new patent applications that would feature the inventor's name, Arabi's sister legally changed her last name from Arabi to Alan to hide her connection to her brother, according to the U.S. Attorney's Office.
Qualcomm paid $150 million of the total purchase price before discovering the fraud. After the sale, which saw nearly $92 million go to Arabi's sister, prosecutors said Arabi laundered the money to further conceal his involvement.
The Abreezio sale also resulted in Qualcomm filing a civil lawsuit against Arabi and his sister. The siblings reached a settlement with Qualcomm in which they agreed to pay more than $47 million to the company.
Arabai was convicted by a San Diego federal jury in April of conspiracy, wire fraud and money laundering charges. Along with prison, Arabi was ordered to pay over $100 million in restitution, along with his co- defendants.
Arabi apologized in court during his sentencing hearing, saying, "I violated the trust of everyone who considered me a mentor, a leader, and a role model."
He also stated that money was not a motivating factor behind his actions, but instead that he was "driven by a desire to be part of an interesting project."
His attorneys stated in court filings that he failed to disclose his involvement with Abreezio, but did not financially profit from the acquisition, while Qualcomm has since made millions from Abreezio's technology.
Two other defendants involved in the company have also pleaded guilty and await sentencing next year.
Sanjiv Taneja, Abreezio's CEO, admitted in his plea agreement that though Arabi's sister was given the title of Abreezio's "chief architect," he had never met her and she wasn't involved in any aspects of the company.
Ali Akbar Shokouhi, who also is a former Qualcomm employee and Abreezio's primary investor, was fired by Qualcomm on conflict of interest grounds, prompting his role in the Abreezio deal to also be kept hidden.
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