Records: Exec in suicide was to plead guilty

Executive Suite: ReiJane Huai, FalconStor Software

ReiJane Huai, then chief executive of FalconStor Software, in his Melville office. (September 2009) (Credit: File / Howard Schnapp)

The former president of a Melville data-storage company killed himself a day before he was scheduled to plead guilty to heading a multimillion bribery scheme, according to court records and several sources connected to the case.

Reijane Huai, the former president and chief executive of FalconStor Software, was listed to be in court to plead guilty at 11:30 a.m. Tuesday before U.S. District Judge Leonard Wexler in Central Islip, according to the judge's calendar.

But Huai committed suicide the day before at his home in Old Brookville.

Josiah Kharje, Wexler's deputy, said Wednesday that the United States Attorney's office had called Kharje on Monday to say that Huai was going to plead guilty before the judge, but then canceled the proceedings because of Huai's suicide.

Two others involved the bribery scheme had pleaded guilty in connection with the bribery scheme, are out on bail and agreed to cooperate with the government against Huai, according to court records and the sources.

The two were Jason Lin, of Flushing, a sales director at FalconStor, and Ted Zahner, a software expert with a division of JPMorgan Chase in Ohio, court records say.

The division, Global Technology Infrastructure, located in Columbus, was the centralized unit that purchased and planned the use of technology for the financial giant's global operations, the court records say.

Court papers and the sources say the bribery scheme that Huai ran involved Zahner's accepting $184,700 in bribes from Lin and others to award FalconStor $11.3 million in software contracts in 2008 and 2009.

The bribes were paid in the form of FalconStor stock options ostensibly granted to an unnamed brother of Zahner's, plus payments for Zahner's membership fees in a golf club, a down payment on a house in Ohio, and gambling debts and entertainment in Macau, China, court papers say.

In order to get cash to pay for some of the bribes, Lin flew to Las Vegas and set up a gaming account in an unnamed casino, the court papers say.

Lin pleaded guilty in March to both conspiracy to travel in interstate commerce to commit bribery and extortion, according to the court records.

Zahner pleaded guilty in July to conspiracy, according to the court records. Huai's lawyer, Joshua Klein, declined to comment Wednesday.

Lin's lawyer, Hugh Mo, declined to comment on the case, but said, of Huai's death, "Nobody cherishes going to prison, but he was a very accomplished man, and I think it's tragic."

Zahner's lawyer, Jonathan Marks, also declined to comment on the case, but said of Huai's death, "It's a terrible thing isn't it? Reijane was obviously a very talented and gifted man, [and] didn't realize he could have a career" afterward.

Robert Nardoza, a spokesman for United States Attorney Loretta Lynch, whose office was prosecuting the case, declined to comment, as did FBI spokesman James Margolin.

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