One of Apple Inc. (NASDAQ:AAPL)’s former executives has been imprisoned for a year and ordered to repay $4.5 million for selling the iPhone maker’s secrets to suppliers, says a report from AP. The culprit, Paul S. Devine, was given the jail term in San Jose federal court in a trial that continued for more than three years after he pleaded guilty to wire fraud, conspiracy and money laundering.
Apple’s zero-tolerance policy
The United States Attorney General’s office ruled in favor of the penalty for Devine but did not define the reason for the delay in his sentencing. Devine was reportedly getting millions for passing information to suppliers and manufacturers who used the secrets to cut more favorable deals with Apple.
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Devine worked as a global supply manager from 2005 until his 2010 arrest. In 2010, the case reached court, and at that time, Apple spokesman Steve Dowling said the company is firmly sticking to its highest ethical standards in the way it does business. Dowling added that they have zero tolerance for dishonest behavior, both inside and outside the company.
According to the original indictment, Devine used his influence at Apple to obtain the secret information and pass that on to Apple suppliers. In return, Devine got rewards from the suppliers and manufacturers. The names of the suppliers were not recorded in the indictment, although it was revealed that the suppliers are related to Apple’s iPhone and iPod products. The indictment said these suppliers are located in various countries in Asia, including China, South Korea, Taiwan and Singapore.
Questions remain unanswered
In 2010, the Cupertino, Calif.-based company was hoping to recover $1 million from Devine, so it is unclear why the amount surged considerably in 3 years. Also there is uncertainty about the short period of imprisonment. Earlier, the Apple executive was facing 20 years of jail, but he eventually received just one year. There are possibilities that Devine helped the court in identifying and convicting some of the people who paid him for the secret information.
According to authorities, federal charges are still pending against Andrew Ang, who was allegedly in touch with several Apple suppliers in Singapore and also shared the kickbacks with Devine.
As of now, there has been no response from Apple officials about the issue.