Carahsoft Boss Built Empire Off Government Sales Before FBI Raid
(Bloomberg) -- Four years ago, Mark Testoni, an SAP SE executive, and Craig Abod, the president and founder of giant software reseller Carahsoft Technology Corp., stood at the podium of an event organized by the Institute for Excellence in Sales.
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Abod was there to accept the institute’s annual lifetime achievement award. Testoni, the previous year’s winner, was there to introduce him. In a recording of the event, Testoni described the founder of Carahsoft as embodying the concept of “extreme customer service.”
“Craig is an institution around our business,” said Testoni, who was at the time an executive at an SAP subsidiary. “The juggernaut he’s created from whole cloth is nothing short of amazing.”
This week, Carahsoft and SAP found themselves once again in the limelight, but this time as the subjects of a yearslong investigation by the US Justice Department into a suspected conspiracy to overcharge government agencies on billions of dollars worth of software purchases, Bloomberg News reported.
In addition, Carahsoft’s Reston, Virginia, headquarters were searched on Tuesday by agents from the FBI and Defense Department. It’s not clear if the inquiry into SAP and Carahsoft, which is a civil matter, is related.
An SAP spokesperson said in a statement the company is cooperating with the civil investigation.
Carahsoft spokesperson Mary Lange previously told Bloomberg News the firm is “fully cooperating” with the FBI inquiry and “operating business as usual.” Carahsoft, Abod and Testoni didn’t respond to calls and emails seeking comment for this story.
The inquiries represent at least a temporary setback for a company that has grown rapidly since Abod started it in 2004. Carahsoft is among a group of resellers and distributors that specialize in navigating complex procurement regulation and streamlining the sales process for clients. Abod has built the company into a massive business by making it the essential middleman in sales between the government and major technology firms, said John Weiler, chief executive officer of the IT-Acquisition Advisory Council.
“They’re like the Visa of IT sales to the government,” said Weiler. “No matter what you buy, Visa gets a piece.”
He added, “They have 1,000 salespeople hammering the phones every day pushing products through various channels.”
The federal government has reported a total of $9.9 billion unclassified prime contract awards to Carahsoft since fiscal year 2014, according to Bloomberg market data. It ranked at No. 45 on Forbes’ 2023 list of the largest private American companies.
“There is no other distributor near its size in terms of federal revenue,” said Noah Dantes, an analyst at the market research firm Canalys.
Carahsoft has had other run-ins with the Justice Department. In 2015, Carahsoft and VMware agreed to pay $75.5 million to resolve allegations that they misrepresented their commercial pricing practices, the Justice Department said. DOJ alleged they conspired to overcharge for VMware products.
There’s little public information available about Abod, whose social media accounts stick largely to business promotion.
Forbes lists Abod as a billionaire, with a net worth of $1.1 billion. He graduated with a computer science degree from the University of Maryland in 1986, according to a university news release. He worked at DLT Solutions for 10 years before starting Carahsoft, according to his LinkedIn profile.
Within hours of the FBI agents descending on Carahsoft’s offices, Abod was pushing for new business on the social media platform X. “With the end of the Federal Fiscal Year quickly coming up on 9/30, #CountOnCarahsoft & our reseller partners to simplify your agency’s IT procurement process,” he said.
--With assistance from Gordon Ebanks.
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