Apple manager charged with taking over US$1 million in kickbacks from suppliers

Monday, August 16, 2010

A global supply manager for Apple Inc. was arrested Friday in California and indicted for wire fraud and money laundering, after accepting over US$1 million in kickbacks. The manager, 37-year-old Paul Shin Devine, used a system of international bank accounts and a front organization in order to receive the payments, reported the San Jose Mercury News.

Andrew Ang, of Singapore, was also named in the indictment. Ang is accused of receiving confidential data, as well as accepting a portion of the kickbacks paid to Devine.

Devine, who lives in Sunnyvale, allegedly passed on confidential information to Asian suppliers of iPhone and iPod accessories in exchange for more than US$1 million. The suppliers were then able to use the information to negotiate better contracts with Apple. The Wall Street Journal named several of the suppliers in question as China-based Kaedar Electronics, South Korea-based Cresyn, and Singapore-based Jin Li Mould Manufacturing, where Ang had worked until 2008.

According to his LinkedIn profile, Devine was a 1996 graduate of the United States Merchant Marine Academy and a 2005 graduate from the MIT Sloan School of Management. He began working at Teradyne in 1998 and left to join Apple in 2005.

In addition to the 23-count federal indictment, Devine is also the subject of a civil lawsuit filed by Apple. The company said that he took more than US$1 million in "payments, kickbacks and bribes" over a period of several years. An Apple spokesperson said that the company "is committed to the highest ethical standards in the way [it does] business," and that there is "zero tolerance for dishonest behavior inside or outside the company."

Devine is being held by the US Marshals Service and was scheduled to appear in a hearing at the US District Court in San Jose, California at 1:30 p.m. PST (20:30 UTC) today. He was not available for comment.