A former Qualcomm executive 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 the one-time vice president of research and development’s employment agreement held that any inventions he created would belong to Qualcomm. Arabi’s attorneys, however, had 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.
A San Diego federal jury convicted Arabi in April of conspiracy, wire fraud and money laundering charges. Along with prison, he 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.”