SAN DIEGO (CNS) — The former vice president of research and development at Qualcomm was convicted Tuesday of scheming to defraud the San Diego tech giant out of $180 million.
Prosecutors said that while working for Qualcomm, Karim Arabi hid his role in the invention of a new microchip technology and the technology's sale to Qualcomm.
The purported inventor of the technology was Arabi's sister, Sheida Alan, then a grad student. But prosecutors said Arabi was behind the technology the entire time, in violation of his employment agreements that stated any inventions he created would belong to Qualcomm.
Prosecutors said Arabi 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 $45 million to the company, according to a prosecution trial brief, though the settlement did not contain any admission of wrongdoing.
A San Diego federal jury convicted Arabi on Tuesday of conspiracy, wire fraud, and money laundering charges.
Two other defendants involved in the company have also pleaded guilty and await sentencing.
Sanjiv Taneja, Abreezio's CEO, is set to be sentenced in July. In his plea agreement, Taneja admitted 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, is slated for sentencing in August. Prosecutors say Shokouhi's involvement with Abreezio was also kept hidden because Qualcomm had fired him on conflict of interest grounds.
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