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ServiceMesh founder indicted over Aussie bank deal allegations

ServiceMesh founder indicted over Aussie bank deal allegations

Australian former CBA exec also indicted over alleged bribery scheme

A US grand jury has indicted a Californian technology executive and a former manager at the Commonwealth Bank of Australia (CBA) 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, was accused of allegedly paying US$2.5 million of bribes to two technology executives at the bank, so they would arrange US$10.4 million of contracts to inflate his company's revenue.

Prosecutors allege this fraudulently caused Computer Sciences Corp (CSC) to award ServiceMesh shareholders a US$98 million "earn-out" bonus, on top of US$282 million that CSC said it paid in November 2013 to buy the Santa Monica-based company.

Pulier, as ServiceMesh's largest shareholder, received about US$30 million of the bonus, prosecutors said.

A former CBA information technology manager was accused by US prosecutors of allegedly helping arrange the contracts in exchange for US$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 the Sydney-based former CBA exec, remains in Australia, prosecutors said.

The US Securities and Exchange Commission filed related civil charges against Pulier.

A lawyer for Pulier did not immediately respond to requests for comment. The former CBA exec’s lawyer could not immediately be identified.

Wednesday's 15-count indictment charges both Pulier and the local IT exec with five fraud counts and one conspiracy count. Pulier faces nine additional counts related to alleged bribery, obstruction of justice, and allegedly filing a false tax return.

Another former CBA 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 US$630,000 of bribes, the SEC said.

Following the merger, Pulier became an executive vice president at CSC.

Pulier resigned in April 2015, one month before CSC sued him in Delaware Chancery Court, accusing him of fraud and alleged breach of contract, according to court records. That case is still pending, the records show.

CSC split into two companies in November 2015, spinning off part of its business as CSRA.

CSC became DXC Technology after completing its spin-merger with the Enterprise Services business of Hewlett Packard Enterprise (HPE) at the beginning of April.

(Reporting by Jonathan Stempel in New York; Editing by Lisa Shumaker)

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