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Apple supplier admits to payments amid kickback allegations

updated 06:35 pm EDT, Mon August 16, 2010

Company named in indictment of Apple employee

Pegatron has admitted that one of its subsidiary companies, Kaedar Electronics, paid brokerage commission to an intermediary for services related to its Apple contracts. Kaedar is one of several companies reportedly involved in a kickback scheme spearheaded by Apple executive Paul Shin Devine, who was arrested late last week.

A federal grand-jury indictment accuses Devine of unlawfully receiving money in return for confidential information that suppliers subsequently used to secure contracts with Apple. Pegatron spokesman Charles Lin suggests Kaedar has supplied the company with iPod packaging for several years, according to a Wall Street Journal report (sub. required).

Pegatron has yet to provide specific information regarding the intermediary, including a confirmation that the company was owned or controlled by Devine. The company denies Kaedar payed money to any individual, while any transaction occurred before it was acquired by Pegatron.

Officials claim Devine took more than $1 million in unlawful payments from various suppliers. The funds were allegedly funneled through shell bank accounts and outside firms. Devine has pleaded not guilty to the indictment, which outlines 23 separate charges, according to Bloomberg. Apple has filed a separate lawsuit against the former employee, with accusations ranging from breach of contract to racketeering.

by MacNN Staff



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