Mike Dano, Editorial Director, 5G & Mobile Strategies
April 10, 2025
3 Min Read
Karim Arabi was Qualcomm's VP of R&D from 2013 to 2016. During that time it looks like he had two good ideas: One was for new technology related to the "design for test" (DFT) sector of the chipset industry. The second was to secretly sell that technology back to his own employer.
At least, that's the basis of a Justice Department action against Arabi that this week produced a federal jury conviction.
"As vice president of research and development, Mr. Arabi was entrusted with protecting Qualcomm's intellectual property rights," said IRS Special Agent in Charge Tyler Hatcher, in a release from the Justice Department. "Mr. Arabi executed a scheme to swindle Qualcomm out of $180 million for what was rightfully their own technology. This guilty verdict is reflective of outstanding investigative work by IRS-CI and our partners at the FBI and US Marshal's Service."
Here's the Justice Department's remarkable indictment against Arabi, first filed in 2021.
The story
According to the Justice Department's indictment, Arabi in 2014 sought to patent technology under the name of his younger sister, Sheida Alan, who was then pursuing a master's degree in Canada, with studies focusing on inkjet printing.
Then, with some other associates, Arabi allegedly used those patents to set up a company called Abreezio. By 2015, Arabi, his sister and their associates began shopping the startup to Qualcomm as a possible acquisition target. According to the indictment, Arabi and his associates worked to hide his connections to Abreezio from Qualcomm.
Related:Smartphone exemption from tariffs is clear as mud
For example, Arabi's sister legally changed her last name to further conceal her relationship with Arabi.
Qualcomm was clearly interested. In October 2015, Qualcomm made wire transfers totaling $150 million for Abreezio. Arabi and his sister received roughly $92 million of that amount. They then began funneling that money into Canadian and Norwegian real estate purchases.
According to the Justice Department, two other defendants in the case have already pleaded guilty: Ali Akbar Shokouhi, another former Qualcomm employee and the primary investor in Abreezio, pleaded guilty to money laundering and is scheduled to be sentenced on August 1. Sanjiv Taneja, Abreezio's nominal CEO, pleaded guilty to money laundering and is scheduled to be sentenced on July 11.
No stranger to the courtroom
Qualcomm, for its part, is a major player in the global wireless industry. The company develops wireless technologies (most notably CDMA) and also sells core chipsets for smartphones and other gadgets. In recent years, the company has been working to expand its chip business into other areas, including cars and IoT.
Related:Smartphone bundles will bend, not break, under Trump tariffs
Throughout its corporate history, Qualcomm has been involved in a wide range of legal battles of various kinds.
For example, Qualcomm's years-long global patent war with Apple kicked off in 2017. The iPhone maker accused Qualcomm of running a "monopolistic" licensing scheme while Qualcomm countered by getting iPhones banned in some countries. The drama ended abruptly in 2019 with Apple waving the white flag, paying Qualcomm a reported $4.5 billion and signing a six-year licensing deal.
Similarly, Qualcomm fought with the Federal Trade Commission in an antitrust case alleging Qualcomm maintained a stranglehold on the market. The company eventually successfully appealed that case.
Most recently, Qualcomm found itself in a legal skirmish with Arm over its acquisition of Nuvia, a chip design firm. Arm claimed that Qualcomm's use of Nuvia's technology violated their licensing agreements. The dispute culminated in a jury trial in 2024, where Qualcomm emerged victorious.
Internationally things are much the same. Regulators in the European Union and China are among those that have taken various actions against Qualcomm.
Related:Trump tariffs won't bring iPhone manufacturing to US shores
Today Qualcomm is working to tap into the AI trend for chipsets.
