Keith Hunter, Securities Fraud, California 2024
Australian Ex-Banker Charged in US Securities Fraud Case
LOS ANGELES - Keith Hunter, a former executive at Commonwealth Bank of Australia, has been charged with participating in a scheme to fraudulently generate revenue for a software company that was being purchased by Computer Sciences Corporation (CSC), leading to a $98 million incentive bonus.
The 62-year-old Hunter, of Surrey Hills, Australia, was named in a two-count criminal information filed in federal court. The information charges Hunter with conspiracy to commit securities fraud and wire fraud, and wire fraud. The scheme allegedly involved inflating revenues for ServiceMesh, Inc., a Santa Monica-based company that provided cloud computer management software.
According to the court documents, CBA employees, including Hunter, received undisclosed kickbacks from a senior executive of ServiceMesh in exchange for awarding the $10 million in contracts to ServiceMesh. Solely as a result of the scheme, ServiceMesh reached a performance goal that triggered CSC to pay a $98 million "earnout payment" to ServiceMesh shareholders in March 2014.
As a result of the scheme, CSC suffered nearly $100 million in losses, with the company paying a base payment of $163 million for ServiceMesh. The United States Securities and Exchange Commission has also filed a civil complaint against Hunter charging him with securities fraud, along with a consent and proposed judgment.
"Schemes like the one charged today compromise the integrity of our financial system, and this defendant's fraud caused significant harm to CSC and its shareholders, all for his own personal profit," said United States Attorney Eileen M. Decker. "Everyone who invests in American companies, especially American workers investing their hard-earned money directly or through a retirement plan, deserves protection from this kind of fraud."
Hunter has pleaded guilty and is currently pending sentencing on bribery charges in an Australian court. Authorities in the United States expect Hunter to face the charges filed today after he completes any sentence he receives in Australia. The two counts in the information together carry a statutory maximum penalty of 45 years in federal prison.
The United States Attorney's Office would like to thank the New South Wales Police Force, Fraud and Cybercrime Squad, in Australia for its assistance in this investigation.
Key Facts
- State: California
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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