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Second supplier reveals role in anti-Apple kickback scheme

post #1 of 13
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A South Korean earphone and headset maker this week admitted it entered into what it believes was a legal consulting contract with an Apple supply manager.

South Korea's Cresyn said on Tuesday that it first met Paul Devine, an Apple global supply manager, in early 2006. The company was in negotiations to supply Apple, and Devine offered consulting services, according to Reuters.

An unnamed official said the company made a "legal contract" with the supply manager in 2007, through which it paid him a "small consulting fee" in exchange for "general information about U.S. markets." Cresyn supplies the ear buds that ship with Apple's line of iPods.

In addition, JLJ Holdings, owner of Jin Li Mould Manufacturing, said it was looking into the accusations of kickbacks made by Apple. The company said that a former Jin Li employee was named in the indictment, along with Devine.

On Monday, Pegatron, the parent company of Kaedar Electronics, admitted it did pay a brokerage commission to an intermediate trading company between 2005 and 2008. The incident occurred before Pegatron acquired Kaedar, which has supplied iPod packing boxes to Apple since 2005. A company spokesperson said that no money was ever paid to an individual.

Three more companies have been named in the case but have not commented: Glocom/Lateral Solutions and Fatestning Technologies of Singapore, and Nishoku Technology in Taiwan.

Devine appeared in a San Jose, Calif., court on Monday and pleaded not guilty to accusations that he shared confidential information with Apple's suppliers to give them an advantage in negotiations. He was arrested Friday and charged with 23 counts, including wire fraud, kickbacks and money laundering.

Devine also faces a civil suit from Apple, alleging that he accepted more than a million dollars in kickbacks from Asian suppliers.
post #2 of 13
Going to be pretty hard to plead innocent when the suppliers are openly admitting the scum-bag was fleecing some extra $$$ to keep himself warm at night.
post #3 of 13
So is he STILL a global supply manager for Apple? Nowhere is listing him as a "former" Apple global supply manager, but it seems that Apple would have fired him before filing suit against him, right?
-360
post #4 of 13
Quote:
Originally Posted by Egocentric View Post

So is he STILL a global supply manager for Apple? Nowhere is listing him as a "former" Apple global supply manager, but it seems that Apple would have fired him before filing suit against him, right?
-360

You can bet that has/will be taken care of. This is SOP. I suspect that along with the civil suit he was served with papers enjoining him from representing Apple and/or setting foot on Apple property. I am sure the suppliers have also been told he is no longer a rep. Even California employment laws cannot protect you when they document you being a thief (they have good security folks in Apple to make sure this stuff is very limited shall we say.)
post #5 of 13
Quote:
Originally Posted by Market_Player View Post

Going to be pretty hard to plead innocent when the suppliers are openly admitting the scum-bag was fleecing some extra $$$ to keep himself warm at night.

You're starting to see the defense here. The customer claims that they thought it was a legal consulting agreement covering general market conditions.

That could be his defense - that he didn't share any company secrets, but only general market information. If his employment agreement doesn't have a 'no outside work' clause, it could be a plausible defense. That's not to say that he's going to win, but he doesn't need to win. Just to throw up enough mud to make Apple want to settle.
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Gatorguy 5/31/13
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #6 of 13
Quote:
Originally Posted by Market_Player View Post

Going to be pretty hard to plead innocent when the suppliers are openly admitting the scum-bag was fleecing some extra $$$ to keep himself warm at night.

Any bozo can plead innocent (as he has) but with the case they have, and his 'consultees' giving him up, it is not going to be easy to defend. Can you say plea bargain? As far as using this for a defense it will not fly with the conflict of interest and a pattern of his 'clients' always getting his bids. It also won't take too much to get somebody to rollover with the inside info - these clients all claim it was before they were acquired by another company or by a former employee.
post #7 of 13
Golly gosh, I guess "conflict of interest" isn't a term that translates into Korean very well.
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Pity the agnostic dyslectic. They spend all their time contemplating the existence of dog.
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post #8 of 13
Quote:
Originally Posted by jragosta View Post

You're starting to see the defense here. The customer claims that they thought it was a legal consulting agreement covering general market conditions.

That could be his defense - that he didn't share any company secrets, but only general market information. If his employment agreement doesn't have a 'no outside work' clause, it could be a plausible defense. That's not to say that he's going to win, but he doesn't need to win. Just to throw up enough mud to make Apple want to settle.

I agree; they're making it sound like he didn't do anything wrong other than not clearly state his position with Apple and instead appear to be giving generic advice as if he were a third party. Apple has to be able to prove that he actually sold secrets, or they won't really be able to touch him.
post #9 of 13
Reminds me of Chicago. If true, Devine and Blagoyevich would make great friends in prison.

That said in such a high level of business or politics I'm sure that such deals are an every day reality, just that they don't get uncovered or even persecuted very often.
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post #10 of 13
Quote:
Originally Posted by jragosta View Post

You're starting to see the defense here. The customer claims that they thought it was a legal consulting agreement covering general market conditions.

That could be his defense - that he didn't share any company secrets, but only general market information. If his employment agreement doesn't have a 'no outside work' clause, it could be a plausible defense. That's not to say that he's going to win, but he doesn't need to win. Just to throw up enough mud to make Apple want to settle.

These companies will all sell him down the river. ``He approached us....'' My rear end he approached these companies and was the master mind behind it all.
post #11 of 13
It would be pretty hard to argue that the "consulting fee" is not some sort of bribe considering his position at Apple.
post #12 of 13
Quote:
Originally Posted by jragosta View Post

That's not to say that he's going to win, but he doesn't need to win. Just to throw up enough mud to make Apple want to settle.

Apple can't settle a criminal case.
post #13 of 13
Quote:
Originally Posted by jragosta View Post

You're starting to see the defense here. The customer claims that they thought it was a legal consulting agreement covering general market conditions.

That could be his defense - that he didn't share any company secrets, but only general market information. If his employment agreement doesn't have a 'no outside work' clause, it could be a plausible defense. That's not to say that he's going to win, but he doesn't need to win. Just to throw up enough mud to make Apple want to settle.

Given Apple's grim predilections for secrecy and Jobs' management style, I think it's more likely they will pursue this until every legal option is exhausted or the dude is behind bars/bankrupted.

A man in his position doesn't have access to enough mud or enough kick to stand in the way of an aggrieved Apple determined to set an example, and a settlement of unspecified terms doesn't set the example they're looking for. I'm betting they're looking to strike fear into the hearts of anyone else so inclined to play fast and lose with Apple info.
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They spoke of the sayings and doings of their commander, the grand duke, and told stories of his kindness and irascibility.
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