Apple Manager Allegedly Sold Secrets For $1m

An Apple manager was arrested on Friday for allegedly receiving more than $1m (£640m) in kickbacks from six Apple suppliers based in Asian countries including China, Singapore and South Korea, according to reports.

Paul Shin Devine, a global supply manager at Apple since 2005, was charged with 23 offences including wire fraud, money laundering and unlawful monetary transactions, according to a federal grand jury indictment. Also named in the indictment was Andrew Ang, an employee of Apple supplier Jin Li, according to reports in the Wall Street Journal and the San Jose Mercury News. The grand jury indictment was filed on 11 August and unsealed on Friday.

Devine was also named in a civil suit filed by Apple on Friday in US District Court in San Jose, California, which alleges fraud and violations of racketeering laws. Devine is scheduled to appear in court in San Jose on Monday afternoon, according to reports.

Apple said in a statement that it “is committed to the highest ethical standards in the way we do business” and has “zero tolerance for dishonest behaviour inside or outside of the company”.

Secrets Sold To Suppliers

The lawsuits both allege that Devine supplied companies including South Korea’s Cresyn Co. Ltd., China’s Kaedar Electronics Co. Ltd. and Singapore’s Jin Li Mould Manufacturing Pte. Ltd. with confidential information allowing them to negotiate favourable contracts with Apple. Kaedar, a unit of Asustek spin-off Pegatron Corp., makes plastic cases for products including iPhones and iPods.

The kickback payments were allegedly sent to bank accounts in his wife’s name in small amounts, and were shared with Ang.

Devine worked at Apple as a manager responsible for selecting and managing relationships with suppliers of parts and materials for iPods and iPod accessories, according to the civil lawsuit.

The company said in the complaint that it began investigating Devine for a possible violation of corporate policy and discovered suspicious emails from his personal Hotmail and Gmail accounts on his company laptop. The emails contained discussions with suppliers that included confidential information and acknowledgements of payments, Apple said. The illegal activities took place beginning in 2006.

Management clashes

Only last week, senior Apple executive Mark Papermaster left the company in a move which was believed to be related to the antenna issues which have marred the launch of the company’s latest iPhone. However, a Wall Street Journal article suggested the Apple exec may have proven incompatible with the company’s corporate culture, and CEO Steve Jobs.