Skip the navigation

Laptop e-mail tipped Apple to kickbacks plot

Apple says it found e-mails during a check of a former manager's laptop

By Martyn Williams
August 17, 2010 07:38 AM ET

IDG News Service - Court papers filed by the federal government and Apple against a former manager detail a scheme that allegedly saw confidential Apple data supplied to Asian electronics companies over more than three years in return for kickbacks of more than $1 million..

The information gave the companies an edge over competitors when bidding for Apple's business and were the basis for the allegations against the former manager, Paul Shim Devine, who was indicted on wire fraud charges last week. The information came from an e-mail cache allegedly found in Devine's laptop.

Devine joined Apple in July 2005 as a global supply manager and was responsible for working with companies that supply Apple with parts and materials for the iPod and its headset. The job gave him access to confidential data including sales forecasts, pricing information and specifications for unreleased products, Apple said.

It was this data that Devine supplied to at least six Apple contractors in Asia, according to a federal indictment and a civil suit filed by Apple.

Devine appeared in court in San Jose on Monday where he pleaded not guilty to the charges. He remains in custody pending a detention hearing Wednesday. U.S. attorney Michelle Kane said that Devine is a flight risk and should not be granted bail.

Apple's investigation into Devine began in April this year. It didn't say what prompted the probe, but Apple investigators discovered a Microsoft Entourage database of e-mails and a cache of Hotmail and Gmail messages on Devine's Apple-supplied laptop. The company took a copy of the drive and began working through its contents.

Apple said the e-mails contained details of payments, and the supply of confidential information that began in October 2006 with a Singaporean company called Jin Li Mould Manufacturing.

On numerous occasions, Devine sent Jin Li information about its competitors that enabled the company to win business from Apple, the lawsuit said. In return Jin Li paid about $1 million in commissions to Devine on Apple purchases, it said.

Jin Li declined to comment on the allegations when contacted earlier Monday.

The payments were allegedly shared with Andrew Ang, an employee of Jin Li who Apple says took a commission of between 15% and 20%. The two kept track of their gains in a spreadsheet and coordinated meetings in Asia where Devine would pass payments to Ang, according to the Apple lawsuit.

Ang was also named in the federal indictment but did not appear in court on Monday.

Five other companies are named in the Apple lawsuit including Cresyn of South Korea, which paid Devine $6,000 per month for "consulting services" since February 2007, according to an agreement between the two that was appended to Apple's complaint.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
Our Commenting Policies