Assistant U.S. Attorneys Meghan E. Heesch, Nicholas W. Pilchak and Eric R. Olah
NEWS SUMMARY – August 9, 2022
SAN DIEGO – Charges unsealed today against four individuals, including two San Diego residents, allege they defrauded a multinational San Diego technology company in its $150 million purchase of a technology start-up controlled by the defendants.
Karim Arabi (“Karim”) and Ali Akbar Shokouhi were arrested today in San Diego, while Sanjiv Taneja was arrested in the Northern District of California. A fourth defendant was arrested in Canada, where she faces extradition proceedings to the United States.
All four defendants are named in a superseding indictment that charges them with fraud and money laundering based on the quartet’s alleged scheme to defraud a San Diego technology company (the “victim company”) into paying $150 million for technology that Karim secretly created and temporarily patented while serving as vice president of research and development at the victim company. The charges subject the defendants to a possible maximum statutory sentence of 20 years in prison; a fine of $250,000 or twice the monetary gain/loss on fraud charges or $500,000 on money laundering charges; and the confiscation of property that constitutes or derives from the proceeds of fraud and all property traceable to such property, as well as the confiscation of all property involved in money laundering offences.
According to the superseding indictment, as CEO of Abreezio LLC, Taneja marketed Abreezio LLC’s valuable new microchip technology to the victim company in 2015. Taneja and his associates claimed throughout the marketing process that Abreezio’s valuable new technology was invented by a Canadian graduate student working in an unrelated field. But no one discovered that Karim—a member of the graduate student’s family and a specialist in the same field as Abreezio’s technology, who then worked at the victim company—was intimately involved in the formation, development and marketing of Abreezio. Indeed, according to court documents, Karim filed the provisional patents on which Abreezio’s core technology was based; called and attended key operations meetings between the defendants and other directors of Abreezio (but not the alleged inventors); and choreographed key steps in the development of the new company—including the selection of Taneja as CEO and the selection of the name “Abreezio.”
The defendants concealed Karim’s key role in Abreezio from the victim’s company because, as detailed in the superseding indictment, Karim’s employment agreements provided that his inventions during his employment would belong to his employer, the victim’s company. By concealing Karim’s participation in Abreezio, the defendants were able to present the new company as “an angel-funded Silicon Valley-based IP startup” entitled to a large fee for its valuable technology, disguising the victim company’s own legal rights to the same technology.
The indictment alleges that Karim hid his hand at Abreezio, in part, by creating fake e-mail accounts to impersonate the alleged inventor. Karim, Taneja and Shokouhi even called Karim by the name of the supposed inventor in some of their communications to disguise Karim’s role.
Abreezio also relied on Karim to provide important inside information about the victim company’s existing technology for use in improving Abreezio’s marketing pitch. In February 2015, according to court documents, Taneja emailed Karim asking for information on the victim company’s “numbers” for comparable technology to then identify the “threshold” we need to cross in [the victim company]” and “help us calibrate our positioning by going in[.]”
The defendants also worked to conceal Shokouhi’s involvement with Abreezio, according to charging documents. Shokouhi had been a vice president at the victim company until 2014 and financed and supported the development of Abreezio through three different entities he controlled. One of Shokouhi’s companies was never disclosed to the victim company during due diligence, however—an attempt to avoid scrutiny, in part because the victim company had flagged conflict-of-interest issues with Shokouhi and the undisclosed company a year earlier sale of Abreezio.
In October 2015, the victim company bought Abreezio for $150 million. As part of the transaction, the victim company was told that Abreezio was the sole and exclusive owner of its technology and that everyone involved in the conception and development of Abreezio’s intellectual property had been disclosed. In reality, the defendants had carefully concealed Karim’s role from the victim’s company. As a result, the victim company paid nearly $92 million to Karim’s family member (the alleged inventor), over $10 million to Taneja, and more than $24 million to two entities controlled by Shokouhi.
The indictment also alleges how the defendants laundered the funds they received from the Abreezio acquisition, including foreign real estate purchases and interest-free loans.
“Fraudsters cannot hide behind sophisticated technology or complex schemes,” said U.S. Attorney Randy S. Grossman. “This office will pursue criminals and their laundered, illicit profits, whether hidden in mattresses or spread throughout the international financial system. Those who steal from our community will face justice.”
“Corporate fraud is a serious crime with serious consequences that not only harms the individual organization, but also affects shareholders as well as entire communities,” said Acting Special Agent in Charge Thomas Ryan of the FBI Field Office. in San Diego. “Today’s arrests confirm that no matter how criminals try to hide, the FBI will work with our law enforcement partners to fully investigate these crimes – we will uncover the truth; we will find the perpetrators; we will pursue justice for the victims.”
“Intellectual property crime threatens our economic well-being, and this indictment shows that we will go after those who try to steal and profit from our nation’s innovations,” said Acting Special Agent in Charge Darren Lian of the Field Office of Investigation. IRS Criminal in Los Angeles. “Schemes like this not only victimize companies, but also affect our US Patent and Trademark Office and our civil courts. IRS Criminal Investigation is proud to work with our law enforcement partners to bring these defendants to justice.
THE INNOCENT Case number 22-CR-1152-BAS
Karim Arabi Age: 56 San Diego, CA
Sanjiv Taneja Age: 59 Cupertino, CA
Ali Akbar Shokouhi Age: 63 San Diego, CA
Federal Bureau of Investigation
Internal Revenue Service, Criminal Investigations
United States Marshals Service
*The charges and allegations contained in an indictment are merely allegations, and defendants are presumed innocent unless and until proven guilty.