Former Apple Employee Reaches Plea Agreement in Fraud Case

Paul Shin Devine, a former Apple employee, pleaded guilty in a San Jose federal court Monday to a fraudulent scheme that cost Apple more than $2.4 million, according to the U.S. Attorney’s Office.

Devine, 38, of Sunnyvale worked at the Cupertino-headquartered company from 2005 to 2010 and was indicted by a federal grand jury Aug. 11, 2010.

Charges filed against Devine include 23 counts of wire fraud, conspiracy, money laundering and accepting kickbacks. Under the plea agreement, he pleaded guilty to one count of each statutory violation, for which the maximum penalty is 20 years in prison and a fine of $250,000. Penalties for money laundering include up to 20 years in prison and a fine of $500,000, or twice the value of the property involved; and the penalty for the kickbacks is up to 10 years in prison and a fine of $250,000, or twice the value of property involved.

Sentencing is scheduled for June 6 before Judge James Ware in San Jose.

Devine’s defense attorney, Berkeley-based Raphael Goldman, was unavailable for comment.

As part of his plea agreement, Devine agreed to pay restitution and forfeiture of money and property worth about $2.28 million.

Devine worked as a global supply manager for Apple. He admitted to a scheme of releasing confidential company information, such as product specifications, pricing and forecasts, to Apple’s suppliers and parts manufacturers. The suppliers and manufacturers gave Devine kickbacks in exchange for the information, which helped them in their negotiations for contracts with Apple.

Devine admitted to moving some of the money he received to overseas bank accounts.

Apple began an investigation in April when it discovered evidence of the kickback scheme on Devine’s Apple-owned laptop.

The U.S. Attorney’s Office declined further comment on the case.

Apple filed a civil lawsuit in August against Devine and an alleged accomplice, Andrew Ang, a former employee of Jin Li Mold, one of the suppliers named in Apple's lawsuit. According to court records, that case would close on Feb. 24, unless one of the named parties decided to reopen it. It is unclear at this time if Apple is continuing with the lawsuit. Apple did not respond to requests for comment.