Forfeits $2.28 million, still faces Apple suit

Paul Shin Devine, the Apple global supply manager who passed confidential information on to suppliers trying to win contracts with the iPod and iPhone maker, has changed his plea to guilty on multiple criminal charges of accepting kickbacks, and will forfeit $2.28 million in money and property, according to the US Attorney's Office in San Francisco. He originally pleaded not guilty to 23 counts of wire fraud, conspiracy and money laundering back in August.

Prosecutors had alleged that Devine accepted kickbacks and other incentives from supplier to provide them with advance information such as includes production costs, projected sales and bids from competitors that they could use to get better contracts with Apple for over two and a half years, starting in February 2007. Authorities said Devine had accumulated more than $2.5 million until he was caught through an Apple internal investigation last April. A search of his home in August ">revealed more than $150,000 in cash stuffed into shoeboxes, along with over $20,000 in foreign currency.

Among the most condemning evidence were Excel spreadsheets maintained by Devine and his supplier counterparts that showed the profits they were making. Devine initially used his own Apple e-mail address for the criminal correspondence, but later switched to GMail and Hotmail accounts when the Apple investigation began. Apple was able to obtain access to those accounts for further evidence. The kickbacks were on top of the $614,000 annual salary and more than $51,000 in bonuses Devine received. He also was awarded some 9,500 shares of Apple stock over a five-year period.

Devine shared some of his kickbacks with a co-conspirator in Singapore-based Jin Li Mould Manufacturing. Other suppliers involved in the scheme, which incorporated shell companies registered by Devine and payments made to his wife and other methods to hide the income, included China's Kaedar Electronics and South Korea's Cresyn Company. Kaedar, owned by Pegatron, is an accessory maker for iPhones and iPods.

Among the property Devine will have to forfeit is a Porsche Cayenne SUV. Sentencing for Devine is still to be decided, but each of the 23 counts carries a maximum penalty of 20 years in prison. He still also faces a civil lawsuit from Apple.

by MacNN Staff