Four Tech Execs Charged in $150M Fraud Scheme Against San Diego Tech Giant

Steve Huff
Steve Huff is an Editor and Reporter at dot.LA. Steve was previously managing editor for The Metaverse Post and before that deputy digital editor for Maxim magazine. He has written for Inside Hook, Observer and New York Mag. Steve is the author of two official tie-ins books for AMC’s hit “Breaking Bad” prequel, “Better Call Saul.” He’s also a classically-trained tenor and has performed with opera companies and orchestras all over the Eastern U.S. He lives in the greater Boston metro area with his wife, educator Dr. Dana Huff.
person holding computer cell processor
Photo by Brian Kostiuk on Unsplash

The Department of Justice (DOJ) charged four people last week, alleging that they deceived a prominent San Diego technology firm in 2015 when the firm invested $150 million in the defendants’ startup Abreezio, which purported to offer innovative new microchip technology based on inventions by a Canadian grad student.

Defendants Karim Arabi and Ali Akbar Shokouhi were taken into custody in San Diego, and authorities arrested Sanjiv Taneja in the Northern District of California. The fourth defendant, Sheida Alan, was taken into custody in Canada. Authorities will seek her extradition to the United States for prosecution.


The DOJ indictment alleges that Arabi and Shokouhi used their positions with the buyer to create a fake multimillion-dollar sale. The defendants allegedly falsified business records and lied to company representatives about the startup’s value. While the DOJ didn’t name the defrauded company in its press release, Karim Arabi’s LinkedIn profile showed he was San Diego-based Qualcomm’s vice president for research and development between 2013 and 2016, and intelligence and sales engagement platform Apollo.io indicates Qualcomm acquired Abreezio in 2015.

A look at Abreezio’s website as archived in 2016 revealed a basic set of pages and just two team members—CEO Sanjiv Taneja and a CTO not named here because he was not included in the indictment. The home page advertised “groundbreaking TRUSENS technology to improve PPA [power, performance, and area] of SoCs [systems on a chip] providing one technology node advantage” and beneath that, in red letters, “Acquired by Qualcomm.”

But what did Qualcomm acquire when it purchased the startup? According to an indictment filed in the Southern California U.S. District Court, the semiconductor and wireless telecommunications products company paid $150 million to acquire Abreezio and proprietary technology—tech actually developed by Qualcomm employees taking advantage of their inside knowledge of the company.

The indictment alleges that Karim Arabi, who was vice president of research and development at the time at Qualcomm, took part in the creation of a new kind of microprocessor while at the same time another Qualcomm VP, Akbar Shokouhi, was funding Abreezio, filtering money through shadow companies.

According to the indictment, Arabi’s employment contract with Qualcomm stated that the company owned any “intellectual property he created” while employed there. So what Abreezio presented as “new” tech developed in part by Sheida Alan (a.k.a. Sheida Arabi), a grad student based in Canada, was already legally Qualcomm property.

The possibility that there was simply some misunderstanding between Qualcomm and Arabi or Shokouhi is quickly eliminated in reading the indictment, which alleges an elaborate coverup to conceal the true provenance of Abreezio’s technology. The scheme described in the court papers involved fake email accounts, Arabi allegedly filing patents using Alan’s name—he stated she was his sister—and money laundering through a combination of real estate transactions and loans. The indictment also alleges that Arabi colluded with Sanjiv Taneja by giving him Qualcomm’s “sensitive internal information about” the tech that Abreezio’s product would replace “in order to fine-tune Abreezio's marketing pitch.”

The defendants all cleaned up when Qualcomm bought Abreezio. Alan and Arabi received almost $92 million, Taneja $10 million and Shokouhi a total of $24 million.

The indictment enumerates a laundry list of financial crimes, including wire fraud, conspiracy to launder “monetary instruments,” and engaging in monetary transactions in property derived from specified unlawful activity. If convicted, the defendants face hundreds of thousands of dollars in fines and the possibility of 20 years in prison.

In response to dot.LA’s request for comment, a Qualcomm spokesperson said, “Protecting intellectual property is a cornerstone of innovation. We thank the U.S. Department of Justice for its work in this case.”

steve@dot.la

Subscribe to our newsletter to catch every headline.

LA Tech ‘Moves’: Mapp Gains New CPO and CTO, Prodoscore Taps Boeing Exec

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

LA Tech ‘Moves’: Mapp Gains New CPO and CTO, Prodoscore Taps Boeing Exec
LA Tech ‘Moves’:

“Moves,” our roundup of job changes in L.A. tech, is presented by Interchange.LA, dot.LA's recruiting and career platform connecting Southern California's most exciting companies with top tech talent. Create a free Interchange.LA profile here—and if you're looking for ways to supercharge your recruiting efforts, find out more about Interchange.LA's white-glove recruiting service by emailing Sharmineh O’Farrill Lewis (sharmineh@dot.la). Please send job changes and personnel moves to moves@dot.la.

***

Read moreShow less

This Week in ‘Raises’: GITAI Lands $30M, Steno Gains $15M

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

Raises
Image by Joshua Letona

A local space robotics startup raised fresh funding to expand the flight model manufacturing facilities throughout the U.S. and increase employment, while a remote litigation platform raised more funding to continue growing its footprint in new markets across the country, develop service channels for its clients and continue expanding its tech team.

***

Read moreShow less

Gitai Raises $30 Million to Expand Manufacturing Footprint in Los Angeles

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

Gitai Raises $30 Million to Expand Manufacturing Footprint in Los Angeles
\u200bPhoto: Gitai

Space robotics company Gitai raised a $30 million Series B extension this week, bringing the total value of the round to roughly $47 million.

The funding will be used to further develop Gitai’s suite of space robots as well as build out its manufacturing footprint in Torrance. Previously Gitai announced it raised a $17.1 million Series B in March 2021; this additional raise is still part of that round.

Read moreShow less
https://twitter.com/samsonamore
samsonamore@dot.la
RELATEDEDITOR'S PICKS
LA TECH JOBS
interchangeLA
Trending