An Apple employee who got over $1.1 million in kickbacks from corrupt Asian Companies who supplied Apple is set to stand trial in the USA after the FBI arrested the man at the weekend.
Paul Shin Devine, a Worldwide Supply Manager at Apple, was charged at the weekend in a US federal grand jury indictment of offenses that include wire fraud, money laundering and unlawful monetary transactions. Devine who was arrested late on Friday is accused of receiving more than $1.1 million in kickbacks from six companies in Asia that supply Appple.
What is not known is whether Apple will dump the Asian manufacturers who supply components for Apple iPhones iPods and iPads.
Andrew Ang, an employee at one of the suppliers has also been named as a person of interest to the FBI.
Devine is due to appear in Court on Monday night Australian time laws.
In a statement issued over the weekend an Apple spoksperson said “Apple is committed to the highest ethical standards in the way we do business. We have zero tolerance for dishonest behavior inside or outside of the company.”
According to the San Jose Mercury the alleged scheme used an elaborate chain of U.S. and foreign bank accounts and one front company to receive payments, the indictment said, and code words like “sample” were used to refer to the payments so that Apple co-workers wouldn’t become suspicious.
The indictment describes a scheme in which Devine used his position at Apple to obtain confidential information, which he transmitted to Apple suppliers, including Ang. In return, the suppliers and manufacturers paid Devine kickbacks, which he shared with Ang. The information enabled the suppliers to negotiate favorable contracts with Apple.
The companies were not named in the indictment, but they were described as suppliers of materials designed for Apple’s iPhone and iPod products.
Devine reportedly opened bank accounts in several countries in Asia, including accounts in his wife’s name, in order to receive the kickbacks. He got access to the money when he traveled through Asia, the indictment said.
Another alleged scheme involved routing kickback payments to CPK Engineering, through which Devine reportedly received disguised kickback payments.
According to sources the Internal Revenue Service, conducted the investigation jointly with the FBI.
Apple’s lawsuit said Mr. Devine began working for Apple in July 2005 as a manager responsible for selecting and managing relationships with companies that supply Apple with parts and materials for iPods and iPod accessories.
Apple’s complaint said it began investigating Mr. Devine last April for a possible violation of its corporate policy and found a cache of suspicious e-mails from his personal accounts in his company laptop computer that contained discussions with suppliers that included confidential corporate information and acknowledgements of payments received.