Apple manager charged with leaking secrets for kickbacks
A global supply manager working for Apple has been charged in a US federal grand jury indictment for wire fraud, kickbacks and money laundering, and is also facing a civil suit from Apple itself.
According to a report by the San Jose Mercury News, 37 year old Paul Shin Devine of Sunnyvale, California was named in the 23 count indictment along with Andrew Ang of Singapore.
The charges relate to an alleged fraud scheme that claims Devine used his security clearance at Apple to provide confidential information about upcoming products to Apple's suppliers, including Ang. The indictment says those suppliers then used the secrets to negotiate favorable contracts with Apple and subsequently paid Devine kickbacks, which he shared with Ang.
The funds were said to be laundered through a series of accounts in US and foreign banks, with the payments identified as "samples" so as not to arouse suspicion. Devine reportedly opened accounts to accept payments under both his and his wife's names, and in some cases was said to accept bribes in person while meeting with the suppliers in Asia.
The companies involved were not named in the indictment, but include suppliers for iPhone and iPod products and were said to be located in "various countries in Asia," including China, Singapore, South Korea and Taiwan.
The case was put together by the US Federal Bureau of Investigation and Internal Revenue Service, which reported that Devine is currently being held U.S. Marshals Service and will face a San Jose, California federal court appearance on Monday. The report said the IRS declined to comment on Ang's current status.
In addition to the criminal prosecution, Apple is also reportedly bringing a civil suit that claims Devine accepted more than a million dollars in "payments, kickbacks and bribes" over several years.
"Apple is committed to the highest ethical standards in the way we do business," said Apple spokesman Steve Dowling in a statement. "We have zero tolerance for dishonest behavior inside or outside the company."
Apple has long worked hard to maintain secrecy in order to keep competitors guessing and to excite customers with flashy product releases, but the case also highlights threats the company faces in working with its own partners in the lucrative business of supplying parts and assembling new products.
Whether the case will have an effect upon the product prototype leaks (primarily from Asian suppliers) that have resulted in regular new explosions of media attention remains to be seen.
According to a report by the San Jose Mercury News, 37 year old Paul Shin Devine of Sunnyvale, California was named in the 23 count indictment along with Andrew Ang of Singapore.
The charges relate to an alleged fraud scheme that claims Devine used his security clearance at Apple to provide confidential information about upcoming products to Apple's suppliers, including Ang. The indictment says those suppliers then used the secrets to negotiate favorable contracts with Apple and subsequently paid Devine kickbacks, which he shared with Ang.
The funds were said to be laundered through a series of accounts in US and foreign banks, with the payments identified as "samples" so as not to arouse suspicion. Devine reportedly opened accounts to accept payments under both his and his wife's names, and in some cases was said to accept bribes in person while meeting with the suppliers in Asia.
The companies involved were not named in the indictment, but include suppliers for iPhone and iPod products and were said to be located in "various countries in Asia," including China, Singapore, South Korea and Taiwan.
The case was put together by the US Federal Bureau of Investigation and Internal Revenue Service, which reported that Devine is currently being held U.S. Marshals Service and will face a San Jose, California federal court appearance on Monday. The report said the IRS declined to comment on Ang's current status.
In addition to the criminal prosecution, Apple is also reportedly bringing a civil suit that claims Devine accepted more than a million dollars in "payments, kickbacks and bribes" over several years.
"Apple is committed to the highest ethical standards in the way we do business," said Apple spokesman Steve Dowling in a statement. "We have zero tolerance for dishonest behavior inside or outside the company."
Apple has long worked hard to maintain secrecy in order to keep competitors guessing and to excite customers with flashy product releases, but the case also highlights threats the company faces in working with its own partners in the lucrative business of supplying parts and assembling new products.
Whether the case will have an effect upon the product prototype leaks (primarily from Asian suppliers) that have resulted in regular new explosions of media attention remains to be seen.
Comments
I guess this guy was the leaker, eh? No more soup for you! Next!
I wonder how long he got way with that before getting caught. Thats about as major as it gets.
I wonder how long he got way with that before getting caught. Thats about as major as it gets.
I wonder if they let him keep getting away with it whilst they continued to gather more evidence?
Apple must be delighted to have figured this out.
"Apple is committed to the highest ethical standards in the way we do business," said Apple spokesman Steve Dowling in a statement. "We have zero tolerance for dishonest behavior inside or outside the company."
There should be an asterisk after "inside" and it should say:
*Except for backdating stock options.
A global supply manager working for Apple has been charged in a US federal grand jury indictment for wire fraud, kickbacks and money laundering, and is also facing a civil suit from Apple itself. ...
This make no sense (as reported).
He was supposedly selling "secrets" to manufacturers, but other sites are reporting that the manufacturers were case manufacturers? What possible "secrets" could be passed to a case manufacturer that would allow them to make a better deal with Apple when they were negotiating their contract? Sounds bogus to me.
It makes far more sense if he was leaking actual product info as in he was the source of all the recent leaks.
Also, if he supposedly made a million bucks doing this over the course of it, he was seriously underpaid. What kind of a moron ruins their whole life for anything under a few million? He would have been getting only a few tens of thousands per leak it seems. That's not enough to do such a serious crime and possibly (like this guy) lose everything over.
Stupid is as stupid does I guess.
There should be an asterisk after "inside" and it should say:
*Except for backdating stock options.
Except everyone involved with that was immediately fired when it came to light and then prosecuted. Just like this time.
What possible "secrets" could be passed to a case manufacturer that would allow them to make a better deal with Apple when they were negotiating their contract?
Possible the case manufacturer was selling the secrets to someone else.
What kind of a moron ruins their whole life for anything under a few million?
The kind of moron who gets life in prison because he murdered someone over a couple dollars. Never underestimate the stupidity a human can commit.
Hopefully this guy can use his kickbacks in jail. LOL
Was he part of a conspiracy to sell mixed false and true information ?
... The kind of moron who gets life in prison because he murdered someone over a couple dollars. Never underestimate the stupidity a human can commit.
Yeah.
It will be interesting to see if Apple drops the suppliers. The article says "six accessory manufacturers" which could be all the main ones for all we know. There certainly aren't that many good ones out there to choose from.
Possible the case manufacturer was selling the secrets to someone else...
Probably the company that released that cheesy iPhone 4 knockoff. They managed to bang it out within a few weeks of the actual iPhone 4, and that's impossible without advance knowledge of the exact dimensions.
I hope he gets the maximum. No deals with the government should be accepted.
There should be an asterisk after "inside" and it should say:
*Except for backdating stock options.
If you have legal knowledge on the practice of "backdating stock options" I'd love for you to share, but I'm guessing you've already "shot your load" on this issue.