By Jonathan Stempel
(Reuters) – A U.S. grand jury on Wednesday indicted a California technology executive and a former manager at Commonwealth Bank of Australia over their alleged involvement in a bribery scheme to generate more money for shareholders of the executive’s cloud computing company.
Eric Pulier, the founder and former chief executive of ServiceMesh Inc, was accused of paying $2.5 million of bribes to two technology executives at the bank, so they would arrange $10.4 million of contracts to inflate his company’s revenue.
Prosecutors said this fraudulently caused Computer Sciences Corp to award ServiceMesh shareholders a $98 million “earn-out” bonus, on top of $282 million that Computer Sciences has said it paid in November 2013 to buy the Santa Monica-based company.
Pulier, as ServiceMesh’s largest shareholder, received about $30 million of the bonus, prosecutors said.
Jon Waldron, a former Commonwealth Bank of Australia information technology manager, was accused by U.S. prosecutors of helping arrange the contracts in exchange for $1.9 million of the bribes, paid mainly through a New Zealand shell company.
Arrest warrants have been issued for both defendants.
Pulier, 50, of Los Angeles, is expected to surrender “in the coming days” while Waldron, 47, of Sydney, is in Australia, prosecutors said. The U.S. Securities and Exchange Commission filed related civil charges against Pulier.
A lawyer for Pulier did not immediately respond to requests for comment. Waldron’s lawyer could not immediately be identified.
Wednesday’s 15-count indictment charges both Pulier and Waldron with five fraud counts and one conspiracy count. Pulier faces nine additional counts related to alleged bribery, obstruction of justice, and filing a false tax return.
The other bank technology executive, Keith Hunter, was in December 2016 sentenced in Australia to 3-1/2 years in prison for his receipt of bribes from Pulier. Hunter received $630,000 of bribes, the SEC said.
Following the merger, Pulier became an executive vice president at Computer Sciences.
Pulier resigned in April 2015, one month before Computer Sciences sued him in Delaware Chancery Court, accusing him of fraud and breach of contract, according to court records. That case is still pending, the records show.
Computer Sciences split into two companies in November 2015, spinning off part of its business as CSRA Inc.
(Reporting by Jonathan Stempel in New York; Editing by Lisa Shumaker)