A mid-level Apple manager was arrested and accused of accepting more than $US1 million in kickbacks from half a dozen Asian suppliers of iPhone and iPod accessories, according to a federal indictment 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 behaviour inside or outside the company."
The alleged scheme used an elaborate chain of US 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 US Marshal, 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 were located in "various countries in Asia," the indictment said, including China, South Korea, Taiwan and Singapore.
In a separate civil suit, Apple sued Devine and claimed he received more than $US1 million in "payments, kickbacks and bribes" over several years.
Devine allegedly opened bank accounts in several countries in Asia, including accounts in his wife's name, in order to receive the kickbacks. He also got them directly when he traveled through Asia, the indictment said.
Another alleged scheme involved routing kickback payments to CPK Engineering, through which Devine allegedly received disguised kickback payments.
The investigation was conducted by the FBI and the IRS.
