Apple Supply Manager Arrested on Kickback Charges

| News

Paul Shin Devine, a mid level global supply manager at Apple, has been arrested on suspicion of supplying confidential information to Asian iPhone and iPod part suppliers in exchange for money. The suppliers were then able to use the information to negotiate better deals with Apple, according to the Mercury News.

Andrew Ang of Singapore was named as a co-conspirator in the case, too. A federal Grand Jury indicted the two on 23 counts that include wire fraud and money laundering.

Apparently Mr. Devine had under the table deals going with parts suppliers in several countries such as China, South Korea, Taiwan and Singapore.

Apple doesn’t seem overly pleased with the situation. “Apple is committed to the highest ethical standards in the way we do business,” company spokesman Steve Dowling said. “We have zero tolerance for dishonest behavior inside or outside the company.”

Apple followed up those words with a lawsuit of its own against Mr. Devine. According to Apple’s civil suit, Mr. Devine accepted over a million dollars in bribes and kickbacks in the past few years.

Mr. Devine is being held by FBI and IRS authorities. He is scheduled to appear in U.S. District Court in San Jose on August 16 at 1:30-PM local time.

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Comments

xmattingly

I vaguely remember some TV drama based on Silicon Valley being in development, which would have the involvement of Fake Steve Jobs. Was that several months ago, maybe?

Anyway, if there was a geek soap opera based on the tech industry, this would certainly be a featured story line. Apple alone could feed said soap opera great ideas for years to come.

geoduck

The might explain where some of the leaks have been coming from

Nemo

You would have to be a gullible fool to believe that the disclosure of secrets about the iPhone and iPod stopped at the suppliers of peripherals.  This explains, at least for me, how certain of the Android smartphones have anticipated the iPhone 4’s set of features.  Android OEMs have neither the talent or financial resources to match Apple’s innovations.  So what do you do?  You acquire Apple’s technology by hook or by crook.  And being located in China and certain of Asian countries, you can engage in this kind skullduggery with impunity.

I am afraid that, as a result of this, Apple, which is already famous for its secrecy, will become even more so, if that’s possible.

Bosco (Brad Hutchings)

Yes, that new “Emergency End Call” button on the Droid 2 was obviously stolen from Apple. Hilarious Nemo.

Here’s something more hilarious for you… Another feature stolen from Apple before it ever shipped on iPhone. Adobe Flash proves it can run on mobile devices.

Nemo

Sophisticated parties understand that one of the major disadvantages counterbalancing the advantage of low cost yet often high quality production in China and certain Asian countries is that you are putting your IP at risk.  One, there is much less respect for IP in those countries, especially the IP of foreign entities, and two the remedies available for infringement and/or theft of IP range from weak to nonexistent.  Though China is a signatory to the WTO and its IP conventions, getting the Chinese government to enforce its treaty obligations and conduct investigations can be futile enterprise, where China perceives its interests to lie elsewhere or where powerful, corrupt officials have an interest in the infringement and/or theft.

Unconventional means are often the best protection for one’s IP.  Apple’s manufacturing partners know that they have more to lose by betraying Apple than by having and keeping Apple as a lucrative business partner.  And so it is for other parties, who have valuable IP and who manufacture in countries with weak IP laws and weak legal institutions.

So you are left balancing the advantages of producing in those countries against the dangers to your IP, and your ability to protect your IP by conventional and unconventional means.

gnasher729

It’s not quiet clear from the article if the companies involved were supplying parts to Apple, or supplying accessories. If the first one is the case, I guess there will be payback time.

Ref Librarian

It is definitely bad for business for the people/companies that get named giving kickbacks for information. If you do it to one company, it is pretty certain that you will do it to other companies.

danmanteufel

As long as we’re posting links irrelevant to the conversation, Che Bosco style…

http://www.foxnews.com/scitech/2010/08/13/google-quashes-pro-hitler-android-apps/

Lancashire-Witch

The might explain where some of the leaks have been coming from

It doesn’t make sense to me to risk exposing yourself by leaking stories to the media while (allegedly) committing criminal offences.
So I don’t see Mr Devine being the source of any of the leaks, unless I’m misunderstanding your train of thought, Geoduck.

geoduck

So I don?t see Mr Devine being the source of any of the leaks,

I’m thinking Mr Devine give out information and whomever he gave it to leaked, deliberately or through someone as unethical as Mr Devine in their organization. In my mind that would still make him the ultimate source.

Silverwess81

If you are Unaware Mr. Devine was caught for one reason and one reason only.

His laptop needed work done to it. The OS needed to be restored. He gave it to his handy IT department at Apple them like me in my IT department look through the Hard drive for possible Viruses and threats that may have affected the company and skim through internet history and documents and fell across the emails from his non apple approved email accounts and discovered what he was doing.

If this Mr. Devine was smart he would have grabbed one of the OSX install disks and run the Zero 7 times to his hard drive then give it to his trusty Apple IT department. When the IT ask why is the Hard drive empty he can say like most users I dont knwo what I did I put the CD in and pressed some buttons I dont knwo what happened it sayd it was going to take some time so i went to dinner.

Why did he get caught because he is an idiot?

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