A global supply manager for Apple was arrested on Friday. The man named Paul Shin Devine was arrested with charges of money laundering, kickbacks and wire fraud after he was indicted for leaking iPod and iPhone trade secrets to suppliers in Asia. Paul Devine has been accused of receiving over $1 million from Asian suppliers for exchanging secret trade information about the iPhone4 unlocked handset and iPod touch. The information provided by Paul Devine was used by the Asian accessory maker to negotiate a lucrative deal with Apple.
Investigation revealed many schemes involving international and US banks where accounts were opened using Devine’s wife’s name. The mediation of many transactions were made by, CPK Engineering, a fake company from which he received bribes. He even devised a secret language where leaked information was written as “samples” so that his co-workers couldn’t find about the transactions.
Another accused in the case is a resident of Singapore named Andrew Ang. He was the receiver of some of the leaked information. The names of the Asian companies that were involved were not disclosed but it was revealed that they were suppliers for iPod Touch and unlocked iPhone4. These companies were located in Taiwan, South Korea, Singapore and China. The investigation was jointly conducted by the FBI and IRS.
On top of the federal indictment, a civil case was filed against him by Apple, in order to get compensation for damages. The nature of the information that was leaked remains unknown and so does the amount of damages. Apple’s response to the arrest of Devine was harsh. The Spokesperson for Apple Steve Dowling said publicly that, Apple maintains a high moral standard in their manner of business and they do not tolerate any dishonest behaviour.
This is the first time in the company’s 34 year long history that an employee is arrested for giving out trade secrets.