If He'd Never Met Charles Wang, Would ReiJane Huai Be Alive Today?

Don Tennant

Last Monday, ReiJane Huai, the co-founder and former president and CEO of FalconStor Software, committed suicide by shooting himself in the chest in front of his Long Island home. The suicide came the day before Huai was to plead guilty to charges related to a bribery scheme that led to his ouster from FalconStor a year ago. That story has gotten fairly extensive coverage in the Long Island press. What hasn't gotten the coverage it deserves is the fact that Huai was a crony of Charles Wang, the co-founder and former CEO of Computer Associates (now CA), and that Wang and another of his cronies showed up at Huai's home sometime later on the day of the suicide.

 

Huai and Wang had been close friends for years, dating back to 1996, when CA acquired Cheyenne Software, where Huai worked as the chief architect of Cheyenne's flagship ARCserve backup software product. Huai went on to become CA's executive vice president and general manager for Asia. He left CA in 2000 to start FalconStor, where he served as CEO until the bribery scheme caught up with him. That scheme involved $185,000 in payments to an employee of JPMorgan Chase to secure millions of dollars worth of business for FalconStor. What followed were an SEC investigation of FalconStor's accounting practices, a criminal proceeding by the U.S. Attorney's office, and class-action lawsuits brought by FalconStor shareholders.

 

That brings us to this excerpt from the New York Post's coverage of the suicide:

His friends -- billionaire New York Islanders owner Charles Wang and Huai's longtime legal adviser, Roy Reichbach -- arrived at the scene of the gruesome suicide [on Monday].

 

"They had a close working relationship for years," said a source close to Wang. "These men were very close, both professionally and personally. Mr. Wang is shocked."

 

Wang, whose Computer Associates in 1996 paid $1.2 billion for Cheyenne Software Inc., one of Huai's former companies, surveyed the scene from behind the tinted windows of a black BMW, while Reichbach went into the mansion.


 

Reichbach, Huai's "longtime legal adviser," is also Wang's longtime legal adviser. Reichbach was vice president, legal, at Computer Associates from 1994 to 2000, and he currently serves as corporate secretary and general counsel at NeuLion, Wang's struggling IPTV services provider that I wrote about in December in my post, "As Charles Wang's World Crumbles, Justice is Served." NeuLion has been hemorrhaging money that Wang's crumbling financial empire can ill afford-it lost over $19 million in 2009, over $17 million in 2010, and another $7.2 million in the first six months of this year.

 

According to the New York Post report, Huai lived in the home with his wife, but it wasn't known if she was home at the time of the suicide, which occurred around 9:00 a.m. It's unclear who, if anyone, was home by the time Wang and Reichbach arrived. In any event, it was a peculiar scene. If Huai's wife was home, why didn't Wang go in to console her? If she wasn't, why did Reichbach go into the home while Wang stayed in his car, peering out of the tinted windows? It just seems odd.

 

It's worth reiterating here for the benefit of anyone who's unfamiliar with the Wang saga that Wang's history at Computer Associates was a seedy one. Although he managed to dodge criminal prosecution in the accounting fraud scandal that landed his successor, Sanjay Kumar, in prison, CA's board of directors determined that Wang was the mastermind behind it all. The New York Times encapsulated the board's findings in a 2007 report:

Charles B. Wang, the founder and former chairman of Computer Associates, oversaw an accounting fraud lasting more than a decade at the software company, according to a scathing report released [on April 13, 2007] by the company's board.

 

Mr. Wang, who owns the New York Islanders and is among the most politically influential people on Long Island, masterminded accounting gimmicks that led his company to report inflated sales and profits, the report states.

 

As a result of the fraud, the company has been forced to spend over $500 million on fines and internal investigations. It is still struggling to rebuild the trust of employees and shareholders, the report says.

 

In a statement, Mr. Wang said he sharply disagreed with the report's conclusions and blamed Sanjay Kumar, his hand-picked successor, for the fraud.

 

Mr. Wang created a "culture of fear" at Computer Associates - now called CA - and deliberately put inexperienced executives in senior positions so that he would have more control, according to the report. He discouraged executives from meeting with each other and arbitrarily fired managers or employees who disagreed with him.

 

"Fraud pervaded the entire CA organization at every level, and was embedded in CA's culture, as instilled by Mr. Wang, almost from the company's inception," the report said.

Before Huai became one of Wang's Long Island cronies, he epitomized the American dream. He came to this country from Taiwan on a college scholarship, worked relentlessly and made what would be far-reaching contributions to the software industry here. He raised a family, enjoyed hard-earned financial success, and was widely admired as a software visionary. So what happened? What were the drivers of his downfall? Was he influenced by others whose skewed sense of ethics and morality made the path he ultimately chose seem acceptable? Those questions raise the one that ultimately needs to be asked: If Huai had not fallen in with the Wang crowd, would he still be alive today?



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Oct 3, 2011 11:54 AM Roy Lawson Roy Lawson  says:

"Mr. Wang created a 'culture of fear' at Computer Associates - now called CA - and deliberately put inexperienced executives in senior positions so that he would have more control, "

This may explain some quality issues with CA products I used in the early 2000s leaving a bad taste in my mouth since then.

Huai "committed suicide by shooting himself in the chest"

I'm no expert on suicide, but a shot to the chest seems odd.  This World Health Organization study took on the morbid task of researching average methods of suicide: http://www.who.int/bulletin/volumes/86/9/07-043489/en/. 

The factors supporting this as a suicide are the weapon of choice (shotgun is least likely to be used in a suicide), gender (male), location (on his property), the number of bullets fired (1), and studies suggest that Asian-Americans are more likely to attempt suicide because of pressures to succeed.

Shots to the chest aren't unheard of, just not the most popular method.  I think that his shady past naturally makes people wonder if he was dispatched by someone else who perhaps held a grudge - or perhaps who didn't want information to come to light in a trial. 

My guess is that a "professional" would have also read the same WHO report and could easily stage a suicide.  This is all just speculation on my part, but there was certainly motive.  Sanjay Kumar is doing time for a crime that Huai was the mastermind.  That would make me just a tad bit angry. 

Then again maybe Kumar is the wrong angle.  This guy left behind a trail of fraud involving major corporations and powerful players across the world.  There are probably more than a few people breathing a sigh of relief right now, and more than a few people with motive.

This has all the makings of a murder mystery.  You've just got to look over the mound of evidence screaming "suicide".  Are the police quietly exploring other angles?

http://libn.com/2011/09/27/ex-falconstor-ceo-dies-in-apparent-suicide/

Detective Vincent Garcia, a spokesman for the Nassau County Police, said. 'We don't comment on a suicide unless it was in a public place. This was at a private residence.'

The police have motive to publicly call this a suicide and buy time.  Conveniently they don't need to discuss this with the media since it occurred at a private residence.  So I wonder if it is really "case closed".

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Oct 3, 2011 12:14 PM Don Tennant Don Tennant  says: in response to Roy Lawson

"Sanjay Kumar is doing time for a crime that Huai was the mastermind."

Just to get the players straight, Wang was the mastermind behind what happened at CA, not Huai.

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Oct 5, 2011 9:56 AM Roy Lawson Roy Lawson  says: in response to Don Tennant

I guess I got my criminals mixed up.  They've weaved quite a web.  In any case, this is certainly an interesting story. 

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Oct 8, 2011 1:55 AM Wakjob Wakjob  says:

Looks like Wang had him bumped off to me. Asian cultures are cutthroat and corrupt to the core.

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Oct 16, 2011 1:34 AM NYIFC NYIFC  says: in response to Wakjob

All due respect, I am not a legal expert, only a hockey fan but writing an article claiming would someone be dead if they had not met Charles Wang or another individual is over the top.

We all get you hate Wang (do you work for Sam Wyly also investigated by the government who despises CW like you?) but at some point you have to produce documented evidence that CW caused this man to kill himself or give it a rest or you are only a man with a vendetta.

Lets just say for a minute all you are claiming is true? How come you did not include Sam Wyly and CA board agreeing to leave Wang alone, then months later Wyly leading the charge again to sue him and breaking his agreement?

Where are the links to the articles of Wyly being investigated by the Government himself for his own business dealings?

Who forced Kumar or any of these people to not call the police and resign as soon as Wang told them to do something illegal?

Every December I see this article Mr Tennant, and now we get one early because one of his friends tragically took his own life. Meanwhile the governor, county execs, and politicians everywhere seem to speak with CW, who despite losing on Mangano's referendum got 67,000 people to agree to have their taxes raised for thirty years.

What's next you going to tell us Kate Murray, Joe Mondello, Mangano, Suozzi, Tom Gulotta are solid, honest citizens. Did you hear Democratic Party Chairman, Jay Jacobs come off like a complete moron discussing Coliseum financing.

I guess I missed the part where you included Al D'Amato in this somewhere because there is no one anywhere on Long Island with his hands in more deals with his own past scandals, not even Mondello and his mouthpiece, Kate Murray.

BTW, if Wang is such a horrible person why would someone with Scott Rechler's background agree to do the Lighthouse project with him and invest 3.7 billion of likely Reckson's money? By 2005 when they combined and given the project all this information was common knowledge.

How come not one elected official in the last decade has simply made these charges and outright said we will do nothing with the Islanders as long as Wang owns them because of them?

Many people would support those politicians for taking such a stance.

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Dec 5, 2011 6:08 AM OldGuy OldGuy  says:

Now I can double down on my bet that Sanjay Kumar will simply do his 12 years and not "commit suicide" when he gets out of jail.  That means he got the message to keep his mouth shut. 

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Sep 11, 2014 1:13 AM paul merrick paul merrick  says:
Thank you for your article mr tennant. Well written and informative. I know you have posted several scathing articles about mr. Wangs shaddy buisness dealings involving CA and smile train charity. I pary and thrust with several wang apologists on other sites and its amazing how people are either blind or unwilling to accept the gross misdeeds and corruption involving charles wang. Once again thank you for your efforting. Reply

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