Court sentences ex-Apple manager to 1-year prison term over kickback scheme

Court sentences ex-Apple manager to 1-year prison term over kickback scheme

A former Apple manager who pleaded guilty to accepting kickbacks suppliers must start serving his sentence in federal prison in February.

A former Apple manager who pleaded guilty to accepting kickbacks from Asian iPhone and iPod accessory suppliers was ordered to start serving his 366-day sentence in federal prison in February, more than four years after his arrest.

Paul Shin Devine, 41, was also told to pay nearly $4.5 million in restitution, U.S. Attorney Melinda Haag and other federal officials announced Friday. He must report to the U.S. Marshall Service on Feb. 19, 2015 to begin his jail time.

Devine, a global supply manager at Apple from 2005 until his arrest in August 2010, admitted to taking kickbacks from Jacky Chua, the founder and former managing director of Jin Li Mould Manufacturing, a Singapore-based Apple supplier. In return, Devine provided Chua and five other accessory suppliers with confidential Apple documents -- including sales forecasts, price targets and unreleased product specifications -- that gave them inside information to craft their contract bids with the Cupertino, Calif. company.

"The suppliers and manufacturers [were able to] negotiate more favorable contracts with Apple than they would have been able to obtain without the confidential information," Haag's office said in a statement.

Devine was arrested in August 2010 after a fourth-month investigation by the FBI and the IRS, and entered a not-guilty plea soon after. In March 2011, after he changed his plea to guilty, he was ordered to turn over $2.3 million in money and property but was allowed to remain free on bail.

According to court documents, Devine and his contact on the supplier side, Andrew Ang, an employee of Jin Li Mould and a relative of Devine's by marriage, ran the kickback scheme from February 2007 until their indictments more than three years later. Ang's indictment remains pending; he remains at large.

In a related case, Chua has been charged by Singaporean authorities with "corruptly giving gratifications" to Devine.

Devine participated in the kickback scam for more than three years, but was found out after Apple discovered email messages from his Hotmail and Gmail personal accounts on his company-provided notebook that showed he provided suppliers with confidential information.

It was unclear why Devine's sentencing had been delayed -- at one point he was slated for sentencing in June 2011 -- and why the amount he was required to forfeit had been increased from the earlier $2.3 million. His relatively light prison sentence -- he originally faced 70 years -- may have been because he cooperated with authorities in their pursuit of others, including Chua and Ang.

In a sentencing memorandum filed on Nov. 24, Devine's attorney cited another kickback case where the defendant had been given probation after working with authorities against another alleged criminal. Devine's lawyer asked the court to impose a sentence of probation without jail time.

After Devine is released from prison in February 2016, he will serve three additional years of supervised release, Haag's office said last week.

Apple-related sales booked by Jin Li Mould's parent company, Jubilee Industries Holdings, also of Singapore, fell by nearly $13 million in 2012, the last year for which Jubilee posted financial records on its website, apparently in reaction to the kickback scheme.

Jubilee's CEO, Ng Boon Leng, who had also been implicated in the Devine dealings, resigned at the end of 2012 to "pursue his own interests," according to that year's annual report by the firm.

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Tags business issuesApplelegalIRSJinTechnology Law & Regulation

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