Despite a last-minute pardon by former President Donald Trump in his criminal case, tech pioneer Anthony Levandowski’s legal woes continue after he was forced to file for bankruptcy protection on the same day he was ordered to pay Google $179 million in a contract dispute last year.
Uber is now taking issue with the proposed terms of his bankruptcy, claiming he used “legally dubious techniques to shelter his wealth from creditors,” according to an Ars Technica article published earlier Thursday.
“I continue to view many of the transactions in which Mr. Levandowski engaged immediately prior to the filing of this bankruptcy case with an incredibly jaundiced eye,” U.S. Bankruptcy Judge Hannah Blumenstiel said on a phone conference last week, the news outlet reported.
Levandowski filed for Chapter 11 bankruptcy protection on March 4, 2020, in the U.S. Bankruptcy Court for the Northern District of California.
“Anthony had no choice but to file for bankruptcy to protect his rights as he pursues the relief he is legally entitled to,” Levandowski’s attorney, Neel Chatterjee of Goodwin Proctor LLP, told FreightWaves at the time.
He listed $50 million to $100 million in assets, compared with $100 million to $500 million in liabilities, according to the filing.
Between 2016 and 2017, Levandowski received $127 million for his work on autonomous vehicle technology at Google. Uber claims in court filings that he “immediately put in motion an elaborate scheme to shield his assets from creditors.”
Court documents filed by Uber’s attorneys claim Levandowski has sheltered more than $66 million in entities belonging to family members and friends, including investing in family residences, personal side projects and exotic tax shelters by founding and funding his own church of artificial intelligence, which he called The Way of the Future. The church closed at the end of the year.
During the 90-day period prior to filing Chapter 11, Levandowski transferred more than $9.2 million to his company, Pronto, as well as to his fiancée, family and attorneys.
Uber is also challenging Levandowksi’s insistence that a Roth IRA he opened in 2016 “be kept out of reach of creditors,” according to recent court filings. The retirement IRA account has accumulated nearly $17.2 million in five years, which Uber attorneys claim doesn’t add up when the maximum amount allowed by the IRS per year was $5,500, now $6,000.
In court filings, Uber claims Levandowski violated IRA guidelines after opening the account, which was to be used for arms-length investments, not investing in his own company. He used the initial $4,326 to purchase 4,326,000 units of his own company, Otto Trucking. Those shares were worth millions after Uber acquired his company, court filings claim.
If the IRA was excluded from the list of exempt assets totaling approximately $17.7 million, Uber attorneys argue it would leave Levandowski approximately $490,000 in exempt assets, including a 401(k) retirement account valued at around $387,000.
What happened? It’s complicated
Levandowksi was sentenced to 18 months in prison in August after pleading guilty to one count of stealing Google trade secrets. He was originally charged with 33 counts of intellectual theft and attempted theft of trade secrets from self-driving startup Waymo in August 2019.
In sentencing Levandowski, U.S. District Court Judge William Alsup said that “this is the biggest trade secret crime I have ever seen,” according to a statement issued by the U.S. Attorney’s Office for the Northern District of California. “This was not small. This was massive in scale.”
Before his pardon by Trump, Alsup had allowed Levandowski to delay the start of his sentence until after the risks from prisoners potentially contracting COVID-19 subsided.
Alsup ordered Levandowski to pay a fine of $95,000 and to pay nearly $756,500 in restitution to Waymo LLC, as Google’s self-driving program is now called. Levandowski was also sentenced to three years of supervised release.
While working at Google, Levandowski received $50.6 million in deferred compensation in December 2015 and an additional $75.9 million in July 2016 while working on the company’s self-driving project named “Project Chauffeur.” Before leaving Waymo, prosecutors alleged that Levandowski downloaded 14,000 Project Chauffeur documents centered around advancements in the company’s lidar technology, from his work computer to his personal laptop in December 2015. Project Chauffeur later became Waymo LLC, after it was spun off from Google.
A short time later, Levandowski founded his own autonomous trucking startup, Otto, in 2016, which was bought by Uber (NYSE: UBER) six months later for nearly $700 million.
In February 2017, Google (NASDAQ: GOOGL) filed suit against rival autonomous trucking startup Uber and Levandowski, alleging the two conspired to steal trade secrets to incorporate into Uber’s own self-driving efforts. Uber agreed to pay Google roughly $244 million to settle the suit in February 2018.
While Uber had an indemnification agreement to pay Levandowski’s legal fees and judgments as part of his contract, the company refused to honor the agreement after Levandowski pleaded guilty to intellectual property theft, which triggered the bankruptcy filing when he was ordered to pay Google $179 million.
In 2018, Levandowski co-founded Pronto.AI, developing a new aftermarket safety system for commercial trucks called Copilot, a far cry from the Level 5 autonomous vehicle technology he had been developing for the past 15 years.
“We’ve made some great improvements in the last 10 years, but we’ve kind of hit the ceiling where it’s difficult to generalize circumstances that exist on the road and have computers be able to handle all of [the possible issues] that happen,” Levandowski said at FreightWaves’ Transparency FreightTech conference in Atlanta in May 2019.
Three months later, Levandowski was forced to step down as Pronto.AI’s CEO after he was indicted on federal charges. Robbie Miller took the reins as Pronto.AI’s CEO in late August 2019.
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