Ex-AT&T Employee Gets Year in Prison Over Disclosures

Oct. 25 (Bloomberg) -- Alnoor Ebrahim, a former AT&T Inc. employee, was sentenced to a year and a day in prison for passing inside information about the company and suppliers including Apple Inc. and Research In Motion Ltd. to the clients of an expert-networking firm.

Ebrahim, 58, a naturalized U.S. citizen who was born in Tanzania, pleaded guilty in June to a single count of conspiracy to commit wire fraud and securities fraud.

He admitted accepting more than $180,000 from Primary Global Research LLC, an expert-networking firm, and passing information about AT&T’s sales of the Apple iPhone and Rim’s BlackBerry products, as well as handsets sold through AT&T’s distribution channel.

“I’m very, very sorry for breaching their trust in me,” said Ebrahim, who apologized to his family, friends, colleagues and AT&T before the judge imposed his sentence.

“I take full responsibility for my actions and I will have to live with this for the rest of my life,” he said. “I stand before you asking for leniency and compassion.”

While Ebrahim faced a term of 18 to 24 months in prison, U.S. District Judge Paul Oetken said today he was crediting the defendant with agreeing to plead guilty and offering to cooperate with the U.S. He also said that he felt a term of imprisonment was warranted to deter others from committing insider trading.

Trial Witness

Ebrahim’s lawyer, Douglas Burns, told the judge that while his client had offered to assist the government, prosecutors eventually decided not to use him as a witness at a series of insider-trading trials.

As a result, Burns said, Ebrahim wasn’t getting the credit for providing “substantial assistance” to the U.S. that cooperators typically get from the government. Prosecutors typically file a letter with the sentencing judge asking that a lesser term be imposed upon the defendant on the basis of the aid they’ve given the government.

“He did come in and he did confess his involvement,” Burns told the judge. “The government elected not to enter into a cooperating agreement with him but it is not to take away from Mr. Ibrahim’s own truthful candor with the U.S.”

Assistant U.S. Attorney Antonia Apps, who prosecuted the case, told the judge that Ebrahim’s criminal conduct didn’t rise to the level of other expert-networking consultants who had pleaded guilty or been convicted after trial.

Prison ‘Warranted’

She also noted that Ebrahim had agreed to pass nonpublic information about AT&T for a period of more than 2 1/2 years while working as a consultant for Primary Global.

“I believe a term of imprisonment is warranted in this case,” Oetken said. “Insider trading is an easy crime to commit but a difficult one to detect.”

The judge also ordered Ebrahim to pay a fine of more than $189,000 and directed him to surrender to a federal prison by Jan. 8. Ebrahim declined to comment after court.

Ebrahim, who Burns said lives in Alpharetta, Georgia, worked as an associate director of channel marketing for AT&T Mobility in Atlanta. He left the company in January 2011, the company said in June.

After court, Burns said that during debriefings with the U.S., his client, who holds master’s degrees in electrical engineering and business administration, described for the government how fund managers could use information about technology companies to trade on the data.

‘Broader Context’

“Mr. Ebrahim contacted me within hours of being contacted by the Federal Bureau of Investigation,” Raymond Guidice, an Atlanta-based lawyer who is also representing Ebrahim, said after court. “While he wasn’t a traditional cooperating witness, he did help the government and he was able to provide a broader context about the meaning and import of this information in the world of hand-held devices.”

The case is U.S. v. Ebrahim, 12-cr-471, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net

To contact the editor responsible for this story: Stephen Farr at sfarr@bloomberg.net