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A federal grand jury in Los Angeles indicted former head of Southern California software company ServiceMesh Eric Pulier on Wednesday, along with a former IT manager for the Commonwealth Bank of Australia (CBA).
The charges include securities fraud and conspiracy, with Pulier alleged to have bribed CBA executives in order to win a $98 million incentive bonus. Authorities also say Pulier paid about $2.5 million in bribes to the IT manager Joe Waldron and another bank executive Keith Hunter to obtain bank contracts for his company.
Computer Sciences Corporation (CSC) entered into an arrangement with ServiceMesh back in 2013, which saw the Pulier-led firm purchased on the basis of its profits.
The deals between Waldron and Hunter at the bank pushed up company revenues and triggered the $98 million incentive payout. The total sale price of ServiceMesh to CSC was $260 million, which comprised $93 million in cash and an earnout payment of $98 million, given to ServiceMesh owners. Authorities say Pulier’s cut was about $30 million.
Arrest warrants were issued for Waldron and Pulier, after Hunter agreed to settle charges in September 2016.
Hunter is currently serving a three-and-a-half-year gaol sentence handed down to him in December from a district court in Sydney.
The former executive general manager of Infrastructure and Operations was sentenced after pleading guilty to two counts of bribery for a parallel case in early 2016.
The first offence related to causing a financial disadvantage to his employer by deception, which saw CBA spending AU$6.65 million on software and other IT-related services — later found by Ernst & Young that the bank did not actually need.
With a maximum delegation of AU$1 million, Hunter split the AU$6.65 million purchase up into seven separate transactions and did not undertake any proper procurement procedures before transacting with ServiceMesh.
The second offence related to Hunter, on an annual salary at CBA in excess of AU$1 million, agreeing to receive financial remuneration of $300,000 by showing favour to ServiceMesh.
CBA, by way of Hunter, purchased McAfee security products from ServiceMesh despite using Hewlett-Packard for its McAfee applications in the past.
On the first count, Hunter received a non-parole sentence of one year, nine months, with an additional one year and three months. On the second count, Hunter received a fixed term of 12 months.
This totals three years, six months, with an overall non parole period of two years, three months.
With AAP
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