Qualcomm is said to have been the victim of a sophisticated fraud. The Los Angeles Times reports The feds have revealed charges against former Qualcomm research vice president Karim Arabi and three others for allegedly tricking the chipmaker into spending $150 million in 2015 to acquire technology it already possessed. After Arabi developed a faster method to test processors, the four launched a scheme to falsely claim that a Canadian graduate student (Arabi’s sister) had invented the technique and was marketing it through a startup. Arabi reportedly hid her involvement throughout the process (her sister even changed her name), leading Qualcomm to buy the startup even though it legally owned the executive’s inventions.
Arabi left Qualcomm in June 2016. Prosecutors further alleged that the foursome laundered money through methods that included interest-free loans and buying real estate overseas. Penalties could be severe if the court convicts Arabi’s group. Each could face up to 20 years in prison and fines of $250,000 or double what they earned from the fraudulent scheme.
Qualcomm sued Arabi, its sister and CEO of the startup in 2017. That case was dismissed without prejudice in 2018, opening the door for another lawsuit, but the company did not raise the possibility of another lawsuit in a statement to The temperature.
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