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Tuesday, August 17, 2010

Paul Shin Devine, Apple Manager Accused of $1 Million Kickback Scheme: Here's the Civil Suit

Posted By on Tue, Aug 17, 2010 at 12:01 AM

click to enlarge The civil suit vs. alleged bad apple Paul Shin Devine is stuffed with damning allegations
  • The civil suit vs. alleged bad apple Paul Shin Devine is stuffed with damning allegations
Suit names Asian firms accused of conspiring with former Apple employee in kickback scheme

Yesterday we reported on the federal indictment of Paul Shin Devine, a former Apple global supply manager accused of masterminding a scheme in which he leaked company secrets to Asian suppliers in return for hefty kickbacks.

In addition to the case brought against the 37-year-old Sunnyvale resident by the U.S. Attorney's Office, the IRS, and the FBI, this is America -- and when you're accused of pulling something like this, you're gonna get sued. SF Weekly has obtained a copy of the lawsuit filed against Devine by Apple, his erstwhile employer.

The civil suit notes an interesting tidbit that wasn't in the federal indictment: Devine was making damn good money from Apple even without his alleged malfeasance. In his five years at the company, in exchange for being a "loyal employee," he was paid some $614,000 in salary and $51,076 in bonus compensation. He was issued 4,500 shares of Apple stock options and 900 shares of restricted stock -- worth nearly a quarter of a million dollars based on yesterday's closing prices. He also got a relocation package.

The suit starts off by accusing Devine of having "demanded and

received over a million dollars in illicit payments, kickbacks, bribes,

and other things of value from companies supplying mechanical parts for

Apple's products." And then it gets serious.

According to the suit, Apple began its own internal investigation of Devine in April, and uncovered the trove of e-mails he purportedly sent to alleged Singaporean accomplice Andrew Ang and several Asian companies containing confidential data and instructions on how to pay his kickbacks. This occurred when Apple officials discovered a Microsoft Entourage database of Devine's Hotmail and Gmail accounts "on the imaged copy of Devine's laptop hard drive."

Among the incriminating e-mails discovered was this one to Andy Yang of Cresyn, Co., Ltd.: "I received your email on my Apple email account. Please avoid using that email as Apple IT Team will randomly scan emails for suspicious email communication for forecast, cost, and new model information." Devine's e-mails also harangued his alleged accomplices to make their payments on time -- and to never send a wire transfer of more than $10,000 as that's the threshold that triggers attention for money laundering.

While the Feds' indictment doesn't name the companies suggested of conspiring with Devine, Apple's civil suit does: Cresyn; Kaedar Electronics Co., Ltd.; Jin Li Mould Manufacturing Pte. Ltd.; Glocom/Lateral Solutions Pte. Ltd.; Nishoku Technology, Ltd.; and Fastening Technologies Pte. Ltd. The information these companies allegedly obtained from Devine helped them make more favorable bids with Apple -- and the money Devine purportedly took from the Asian firms was spread into at least 14 different bank accounts.

A plethora of damning e-mails and wire transfers between Devine, Ang and all the aforementioned companies are laid out within the suit. Apple alleges Devine received $1 million alone from Jin Li Mould.

Devine is being held without bail by the Feds. Poring through the painstakingly detailed, 47-page suit against him, it appears Apple is coming after its former employee in a manner that makes its treatment of the Gizmodo boys look like a trip to the nail salon.

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About The Author

Joe Eskenazi

Joe Eskenazi

Bio:
Joe Eskenazi was born in San Francisco, raised in the Bay Area, and attended U.C. Berkeley. He never left. "Your humble narrator" is a staff writer and columnist for SF Weekly, which he has written for since 2007. He resides in the Excelsior with his wife, 4.3 miles from his birthplace and 5,474 from hers... more

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