A federal grand jury has indicted an Apple supply manager and an individual involved in the company’s supply chain on 23 counts including money laundering, fraud, and kickbacks. The two individuals set up an elaborate scheme involving several of Apple’s suppliers.
Paul Shin Devine used his clearances within Apple to obtain information that was then shared with suppliers. This information was then used to negotiate contracts, and upon their awarding a kickback was paid to Devine.
Payments were delivered to bank accounts across the US and Asia, which were broken up into small payments to avoid suspicion, and even placed in his wife’s name to conceal the true recipient of the money. It is unclear if his wife was a willing participant in the crime, although she has so far not been charged.
Devine in turn would share this with Andrew Ang of Singapore, which was also involved in the scheme and an employee of one of Apple’s suppliers. It is believed that Ang and Devine cashed in on the scheme for at least three years starting in October 2006.
US marshals were holding Devine as of press time, although Ang’s whereabouts were not known. Devine is also being sued by Apple for his involvement on Friday, accusing him of receiving over million in payments.
“Apple is committed to the highest ethical standards in the way we do business,” Apple spokesman Steve Dowling said in a statement. “We have zero tolerance for dishonest behavior inside or outside the company.”
In Apple’s own complaint, it says it found evidence of the scheme on his work laptop computer, which included e-mails from personal e-mail accounts confirming receipt of payments as well as confidential information on the company itself.
It was not clear if Apple still has a working relationship with the suppliers Devine and Ang worked with. The suppliers — from several companies across southeast Asia — made parts for Apple’s iPod and iPhone products.
The former Apple executive is expected to appear in court Monday.