Apple 2.0

Covering the business that Steve Jobs built

Apple manager arrested (updated)

August 14, 2010: 8:17 AM ET

Accused of accepting more than $1 million in kickbacks from iPhone and iPod suppliers

Photo: Apple Inc.

A mid-level Apple (AAPL) manager was arrested Friday and charged in federal court with selling company secrets to more than half a dozen Asian suppliers, according to the San Jose Mercury News.

Paul Shin Devine, 37, of Sunnyvale, Calif., a global supply manager for Apple, and Andrew Ang, of Singapore, were named in a 23-count federal grand jury indictment for wire fraud, money laundering and kickbacks, according to the Mercury News. In a separate civil suit, Apple claimed Devine accepted more than $1 million in "payments, kickbacks and bribes" over several years.

"Apple is committed to the highest ethical standards in the way we do business," Apple spokesman Steve Dowling told the Mercury News. "We have zero tolerance for dishonest behavior inside or outside the company."

According to the Mercury News report, the indictment describes a scheme in which Devine, who was privvy to confidential information about future products through his position at Apple, transmitted that information to Asian suppliers and manufacturers, including Ang, enabling them to negotiate favorable contracts. In return, the companies paid Devine kickbacks, which he shared with Ang.

According to the indictment the Asian suppliers included companies in China, South Korea, Taiwan and Singapore that supplied materials designed for iPhones and iPods. The Wall St. Journal on Saturday named several companies allegedly involved in the scheme: Cresyn Co. Ltd. in South Korea, Kaedar Electronics Co. Ltd. in China and Jin Li Mould Manufacturing Pte. Ltd. in Singapore

Devine, via LinkedIn

Seth Weintraub, citing LinkedIn, reports on 9to5Mac that Devine graduated from the Merchant Marine Academy in 1996 and MIT's Sloan School of Management in 2005. He worked at Teradyne from 1998-2005 before joining Apple in 2005. His title, according to LinkedIn, was a senior operations manager, iPod division. A photo on his FaceBook page shows him with his wife and a small child.

Devine is being held by the U.S. Marshals Service and was not available for comment. He is scheduled to appear Monday at 1:30 p.m. PST in U.S. Northern District Court in San Jose.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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