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Ex-Apple manager pleads guilty to fraud in kickback scheme

Dan Nystedt | March 1, 2011
Paul Devine, a former Apple manager accused of taking kickbacks from the company's suppliers in Asia, pleaded guilty in federal court in San Jose to wire fraud, conspiracy and money laundering, the U.S. Department of Justice said Monday.

FRAMINGHAM 1 MARCH 2011 - Paul Devine, a former Apple manager accused of taking kickbacks from the company's suppliers in Asia, pleaded guilty in federal court in San Jose to wire fraud, conspiracy and money laundering, the U.S. Department of Justice said Monday.

The plea means he "admitted to engaging in a scheme to defraud Apple of its money or property and its right to his honest services while he was employed with the company from 2005 through 2010," the DOJ said in a statement.

Devine also agreed to forfeit more than $2.25 million in proceeds from the scheme.

Devine collected kickbacks from several Apple suppliers in Asia that depended on him to provide them with inside information meant to help them negotiate favorable contracts with the U.S. electronics giant, the DOJ said. The information included confidential documents from Apple, such as product forecasts, road maps, price targets, product specifications and other data obtained from Apple's business partners. In return, these companies paid Devine a percentage of the business they did with Apple.

The loss attributable to his offenses was just over $2.4 million, the DOJ said. Apple filed a civil case against Devine last year.

Devine is free on bail and will be sentenced June 6. He faces decades in jail as well as hundreds of thousands of dollars, if not millions, in fines. Details of his plea agreement with the DOJ were not available.

The investigation against Devine began in April of last year when Apple found evidence of the kickback scheme on Devine's Apple-owned laptop. The Sunnyvale, Calif., man was indicted Aug. 11 .

Shortly after he was charged, federal agents found cash worth more than $150,000 in shoe boxes during a search of Devine's home.

Others were indicted along with him, including Andrew Ang, an employee of Singapore supplier Jin Li Mould Manufacturing. The original complaint also named Betty Wu, of Kaeder Electronics in China, which is owned by one of Apple's main suppliers, Taiwan's Pegatron Corporation. Several other Asian companies were also named in the complaint.

 

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