Former Apple Executive jailed and fined
A former Apple executive Paul Shin Devine, who was Apple Global Supply Manager, found himself on the wrong side of the law when he was sentenced in a San Jose federal court earlier last-week nearly 3 years after being convicted of wire fraud, conspiracy and money laundering in relation to selling Apple iPhone and component secrets to Apple’s suppliers.
Mr. Devine who made millions by selling information along with imprison will have to repay almost $4.5m (£2.8m) of the money he made from his scheme.
Paul Shin Devine made a league with manufacturers to learn about Apple products and practices to help them negotiate better deals, for which he was paid handsomely. According to information published by the Department of Justice, Devine’s scheme began in 2007 when he agreed to pass on product forecasts, pricing targets and product specifications to manufacturers in return for monetary payments.
To carry out his scheme, Devine set up a shell company called CPK Engineering to launder the cash he received from suppliers.
Suspicion of his scheme came about when emails were found in which agreement was made to hand over inside information for payment. An investigation was subsequently launched.
Case into activities by Former Apple Executive started
Apple spokesman Steve Dowling said in 2010 when the case was tried that “Apple is committed to the highest ethical standards in the way we do business. We have zero tolerance for dishonest behavior inside or outside the company.”
Furthermore, “The original indictment described 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, according to the indictment. The companies were not named in the indictment, but they were described as suppliers of materials designed for Apple’s iPhone and iPod products. They are located in “various countries in Asia,” the indictment said, including China, South Korea, Taiwan and Singapore.”
Although the companies Devine received kickbacks from was not named, according to Macrumors
“one of the confirmed companies Devine received kickbacks from was Kaedar Electronics, which was a subsidiary of long-time Apple manufacturing partner Pegatron. Kaedar supplied Apple with iPod packing boxes starting in 2005, and admitted to paying kickbacks to an intermediary company between 2005 and 2008 in exchange for confidential Apple information that assisted certain contract negotiations with the company.”
At the initial stage of the investigation Devine was sentenced to 20 (twenty) years but is now facing a much shorter time. Furthermore, Devine’s kickback amount was previously estimated at roughly $1 million, but is now at $4.5 million. The reason for these changes are unclear at this moment.