A midlevel Apple manager was arrested Friday and accused of accepting more than $1 million in kickbacks from half a dozen Asian suppliers of iPhone and iPod accessories in a federal indictment unsealed and a separate civil suit. Paul Shin Devine, a global supply manager, and Andrew Ang, of Singapore, were named in a 23-count federal grand jury indictment for wire fraud, money laundering and kickbacks.
“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.” The alleged scheme used an elaborate chain of U.S. and foreign bank accounts and one front company to receive payments, the indictment said, and code words like “sample” were used to refer to the payments so that Apple co-workers wouldn’t become suspicious.
Devine, 37, of Sunnyvale, is being held by the U.S. Marshals Service, according to the Internal Revenue Service. He could not be reached for comment. IRS Agent Arlette Lee declined to comment on Ang’s whereabouts. The indictment describes 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.