Ex-Qualcomm executive admits tricking the chipmaker into spending $180M to buy its own technology

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Ex-Qualcomm executive admits tricking the chipmaker into spending 0M to buy its own technology
Sanjiv Taneja, one of the three individuals indicted last year for defrauding chipmaker Qualcomm of over $150 million, has pleaded guilty to money laundering. The plea relates to a $1.5 million transaction involving the funds obtained by Taneja and his co-defendants from Qualcomm. According to the San Diego Union-Tribune, the San Diego-based company was deceived into purchasing technology that already belonged to them. The other two individuals indicted in the case were Karim Arabi and Ali Akbar Shokouhi.
Arabi, who worked as Qualcomm’s vice president of research and development, developed a faster method for evaluating microprocessors during the “design for test” phase. Under his employment contract, any intellectual property created by him while working for Qualcomm automatically became the property of the company.

However, Taneja confessed in his plea agreement that he and his co-defendants decided to personally profit from Arabi’s invention instead of giving it to Qualcomm. They devised a plan to conceal Arabi’s involvement in a startup company that claimed ownership of the technology which belonged to Qualcomm.

During the negotiations between Qualcomm and the startup, Arabi was still employed by Qualcomm. Qualcomm intended to acquire the technology created by Arabi, essentially buying its own technology. The company was informed that the startup was backed by angel investors, who are wealthy individuals that invest in small companies in exchange for equity. Qualcomm agreed to pay $180 million for the startup, with $150 million being paid upfront in cash.

Qualcomm was tricked into agreeing to pay $180 million for technology it technically owned

Unbeknownst to Qualcomm, the technology it purchased was actually developed by its own employee. The company was told that a Canadian graduate student affiliated with the startup was the inventor. However, Arabi’s younger sister impersonated the student, and she was listed as the inventor on provisional patents. Arabi filed the patent applications using fake email accounts to hide his identity.

Acting U.S. Attorney Andrew R. Haden stated, “Fraud and deceit undermine legitimate businesses and the marketplace, whether they victimize small businesses or multinational corporations and their shareholders. This office will seek justice against wrongdoers, big and small alike.”

Qualcomm is a fabless chipmaker, meaning it designs its own chips but outsources the manufacturing to contract foundries like TSMC and Samsung Foundry. TSMC currently manufactures Qualcomm’s flagship chipset, the Snapdragon 8 Gen 2.

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