Friday, 29 September 2017 19:47

Comm Bank executives indicted in US over alleged fraud Featured


Two executives of the Commonwealth Bank have been indicted by a US federal grand jury in a case of alleged bribery involving IT services company ServiceMesh which was based in Santa Monica, California.

The indictment alleges that Eric Pulier, founder and chief executive of ServiceMesh, was behind the fraud and paying US$2.5 million to two executives at Commonwealth Bank.

In exchange for this amount, the US Department of Justice alleges that the two bank executives facilitated US$10.4 million in contracts for software sales to CBA in late 2013 and January 2014.

The bank's contracts triggered what is known as an "earnout" payment as part of a sale deal with IT giant Computer Services Corporation, which led to it paying an additional US$98 million to shareholders of ServiceMesh. Of this, about US$30 million went to Pulier.

Also charged was former CBA IT manager John Waldron for allegedly helping approve contracts with ServiceMesh in exchange for approximately US$1.9 million in bribes which was paid to him mostly through a shell company in New Zealand.

"Warrants for the arrest of Pulier, 50, of Los Angeles, and Waldron, 47, of Sydney have been issued," the announcement by the US Department of Justice said. "Pulier is expected to surrender to authorities in the coming days. Waldron remains in Australia facing related charges brought by Australian authorities."

The indictment describes a complicated scheme. Pulier allegedly agreed to pay bribes to Waldron and another CBA IT executive, Keith Hunter, for their assistance in obtaining contracts to help boost the revenue earned by ServiceMesh.

The contracts were needed to push ServiceMesh revenues over US$20 million – the threshold that triggered CSC paying the incentive bonus. CSC paid ServiceMesh shareholders, of which Pulier was the largest, an Earnout payment of US$98 million in March 2014.

Some part of Pulier’s ServiceMesh shares were held by a company called TechAdvisors. The indictment alleges that after TechAdvisors received its earnout payment, Pulier caused TechAdvisors to transfer US$4.8 million to a purported non-profit company named Ace which was later renamed The Ace Foundation.

Ace was headed by a childhood friend of Pulier, who transferred US$2.5 million to accounts held by Waldron and Hunter in Australia, New Zealand and the US.

ServiceMesh was sold to NASDAQ-listed CSC in 2013.

Update, 2 October: A spokesman for Pulier issued the following statement: "Eric Pulier has been wrongly accused of crimes he did not commit. The evidence will show that Pulier did not bribe anyone for contracts to increase the earnout payment to ServiceMesh shareholders.

"To the contrary, the contracts ServiceMesh signed with the Commonwealth Bank of Australia in 2013 and 2014 were legitimate. CSC touted ServiceMesh’s work for CBA as a 'success story' even long after false allegations were made about bribery.

"Indeed, far from being defrauded in its acquisition of ServiceMesh, CSC’s chief executive publicly acknowledged that the ServiceMesh acquisition 'really paid off' for CSC.   We are confident that Pulier will be vindicated.”


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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.



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