Executives at Santa Monica-based ServiceMesh Inc. raked in nearly $100 million in bonus cash by bribing a former Australian banking executive, according to charges filed Tuesday by federal prosecutors and the Securities and Exchange Commission against the banker.
The U.S. Attorney’s Office said in their charging documents, filed in federal court in Los Angeles, that American citizen Keith Hunter, 62, accepted $630,000 as part of a scheme to help senior executives at ServiceMesh earn a post-sale incentive bonus payout after the company was bought by Computer Sciences Corporation in 2013. Hunter, an executive at Commonwealth Bank of Australia at the time, and a colleague approved software contracts with ServiceMesh that qualified company shareholders for a bonus payout of $98 million, on top of CSC’s initial $163 million purchase.
That included more than $30 million for the ServiceMesh executive who allegedly was behind the bribes.
Hunter’s attorney, Manhattan Beach-based Patrick Carey, declined to comment.
Neither the U.S. Attorney’s criminal filings or the SEC’s civil filings explicitly mention who the ServiceMesh executive who initiated the scheme is – the individual is referred to as “co-conspirator #1” by federal prosecutors and “scheme partner” by the SEC. Assistant U.S. Attorney Stephen Cazares, who is prosecuting the case, also declined to identify the individual, and Catherine Brilliant, who is handling the case for SEC, declined to comment at all. Cazares said the “investigation is ongoing.”
However, details in the filings match up identically to allegations made by CSC in a lawsuit against ServiceMesh’s founder Eric Pulier in Delaware Chancery Court. In that case, Pulier is alleged to have funneled more than $2 million to two Commonwealth Bank of Australia executives in exchange for approving more than $10 million in contracts without which the incentive payout would not have happened.
Pulier’s attorney, Mark Holscher of downtown’s Kirkland & Ellis, did not immediately respond to request for comment.
