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Apple Manager Arrested In Kickback Scheme

Posted by timothy on from the market-distortion-field dept.

pickens writes "A midlevel Apple manager was arrested Friday and accused of accepting more than $1 million in kickbacks from half a dozen Asian suppliers of iPhone and iPod accessories in a federal indictment unsealed and a separate civil suit. Paul Shin Devine, a global supply manager, and Andrew Ang, of Singapore, were named in a 23-count federal grand jury indictment for wire fraud, money laundering and kickbacks. 'Apple is committed to the highest ethical standards in the way we do business,' Apple spokesman Steve Dowling said in a statement. 'We have zero tolerance for dishonest behavior inside or outside the company.' The alleged scheme used an elaborate chain of US and foreign bank accounts and one front company to receive payments, the indictment said, and code words like 'sample' were used to refer to the payments so that Apple co-workers wouldn't become suspicious."

36 of 218 comments (clear)

  1. Memo... by grub · · Score: 5, Funny


    You're "dogs don't shit where they eat"-ing it wrong.

    Steve

    --
    Trolling is a art,
  2. highest ethical standards by Anonymous Coward · · Score: 5, Insightful

    'Apple is committed to the highest ethical standards in the way we do business,' . That's why we manufacture in China.

    1. Re:highest ethical standards by Anonymous Coward · · Score: 5, Informative

      slave labor, destroying the environment, etc...

    2. Re:highest ethical standards by rtaylor · · Score: 2, Insightful

      There are more ethical business people in China than the United States. There's lots more unethical ones too.

      --
      Rod Taylor
    3. Re:highest ethical standards by rotide · · Score: 4, Insightful

      Maybe the _whole reason_ it's cheaper to do so? Because it's basically akin to slave labor? Shit doesn't get made for pennies when you have a well paid and cared for workforce but it's easy to ignore the realities of really, REALLY, sub par working conditions when you get a toy to play with after you dropped some of your disposable income, isn't it?

    4. Re:highest ethical standards by WindBourne · · Score: 3, Insightful

      And yet, places like Germany in which they make MORE per hour, work less, have similar productivity are getting jobs there. Hmmm. I wonder why? Because the companies are about where they work at?

      --
      I prefer the "u" in honour as it seems to be missing these days.
    5. Re:highest ethical standards by CRCulver · · Score: 4, Informative

      If Americans were willing to work cheaper (and were actually allowed to), we might get some jobs coming back. Instead, we get labor unions that argue for high wages and benefits at the cost of actual jobs.

      The Nordic countries are passionate about unions, with something like 80% of workers belonging to one (versus 7-12% for American private sector workers), and yet their unemployment figures haven't suffered. Blaming unions is the easy thing to do, but examine the chronology and you'll find that offshoring really took off long after the American labor movement ran out of steam.

    6. Re:highest ethical standards by jcr · · Score: 4, Insightful

      That's why we manufacture in China.

      You say that like it's a bad thing. People take factory jobs in China for the same reason that they take any job anywhere else in the world: it beats the alternatives. If Apple pulled out of China, that's a couple hundred thousand people out of work. If the rest of the global electronics industry did likewise, we're talking tens of millions.

      Perhaps you should take a moment to google "comparative advantage". Then, maybe you should look into how manufacturing is raising the standard of living in China, just like it did here when we went through the industrial revolution.

      -jcr

      --
      The only title of honor that a tyrant can grant is "Enemy of the State."
    7. Re:highest ethical standards by Sarten-X · · Score: 3, Interesting

      The labor unions aren't inherently the problem. It's what they argue for (in America, at least).

      For example, I'd have no problems with a union arguing that the CEO can't make more than 10 times the average starting salary, or that workers must be allowed to take a significant (but reasonable) amount of unpaid leave without risking their job.

      I have a problem with unions requiring a certain minimum salary, paid vacations, and other amenities that only serve to cost the employers money without increasing productivity.

      In my opinion, all details of that agreement should be negotiable on an individual basis.

      If employees want to group their negotiations, that's fine. Don't apply the terms of one employee's contract to someone else. Don't require workers to participate in a strike if they don't want to. Don't require union membership. Don't drive the employer to bankruptcy pushing for ever-higher wages.

      --
      You do not have a moral or legal right to do absolutely anything you want.
    8. Re:highest ethical standards by epine · · Score: 3, Interesting

      If Americans were willing to work cheaper (and were actually allowed to), we might get some jobs coming back. Instead, we get labor unions that argue for high wages and benefits at the cost of actual jobs. Employment should be an agreement exchanging work for pay. In my opinion, all details of that agreement should be negotiable on an individual basis.

      I'm no fan of unions in their modern guise as bargaining collectives, but in the early days unions made tremendous contributions to workplace safety (even matters as small as functional fire escapes). Still, it surprises me that your rant makes no acknowledgement whatsoever of having encountered a positive argument on the validity of unionization. It's clear that some powerful unions overstayed their welcome, and damaged their membership through excessive demands. No organizational structure is perfect. Union leaders make good coin, and sometimes succumb to the temptation to justify their fat pay packet by engaging in brinkmanship negotiation tactics. It takes an extremely secure leader to pocket a fat pay cheque and do nothing, even where that's the best course of action.

      On the wage front, it's fairly orthodox among modern economists to believe that a minimum wage does more harm that good to low income earnings (by making it impossible for many to get a job at all).

      On the other side of the zinc coin, it's already the case that many companies view minimum wage earners as a pool of disenfranchised schleps who wouldn't know their legal rights if bitten on the backside. Many rights in America exist only if you're wealthy enough to (credibly) threaten to enforce them. Even small-claims court is daunting for someone at a sixth grade literacy level who grew up in an Elbownian-speaking household. It's true the disenfranchised could pool their resources together to protect their rights, in a process resembling unionization, with no fear of reprisals as they work the bugs out of their collaborative process. I've always thought that shit flows down hill well enough on its own accord without so many eager and active helping hands. The reason many economic theories don't work out in practice as advertised is that in much of America, shit flows down hill in pressurized pipelines. Discussions on how to reduce the pipeline pressure lead to questions of civil society, a total non-starter in present day America. First reduce the pipeline pressure, then eliminate minimum wage. In that order, I think it would work.

      Is there a way to eliminate the minimum wage to reap the theoretical economic benefits without hanging a "kick me" sign on the bottom rung of the employment ladder? Still haven't figured this out. I'm not against two year apprenticeships at a wage lower than the current minimum, as more of a temporary kick-me sign, though it would surely be abused in some quarters.

      Your African aphorism is a bit of red herring. By the time a country has the social infrastructure to engage in productive international trade, the standard of living is already rising abruptly. Ten to twenty years later, not so cheap any longer, and maybe not a bargain at all in relative productivity. I believe the standard of living in Mexico is now comparable to the standard of living I experienced growing up in Canada, long ago.

      Usually after an abrupt rise in standard of living a nation faces a painful round of internal change before resuming rapid growth. Even Japan had a major hiccup after achieving American affluence until an old custom regarding financial reporting shell games was finally dismantled.

      What I'd like to hear from Apple is that they have canned all the corrupt vendors who went along with the other side of the illicit transactions. That would send a strong message that they mean business on ethical procurement. Merely sacking the individuals with their hands caught in the cookie jar is 99% business as usual.

    9. Re:highest ethical standards by CRCulver · · Score: 4, Informative

      I have a problem with unions requiring a certain minimum salary, paid vacations, and other amenities that only serve to cost the employers money without increasing productivity.

      Again, that's what you get in the Nordic countries, and it doesn't seem to have much of an effect on employment figures.

      In fact, the first item, minimum wages, falls entirely to collective bargaining between unions and industries, at least here in Finland. There is no government-mandated minimum wage. Result? Even the most lowly of cleaners make around $10/hour, with slightly higher wages for night shifts and double pay for Sundays.

      No one forces you to join unions here, or participate in strikes. The union's got your back even if you don't want to pay dues (which are minimal), but of course you do miss out in voicing your concerns in collective bargaining if you don't join.

      The second item, paid vacations, have little to do with unions in most of the developed world because it is mandated by law. Unions might be responsible for the extra 10 days at some places around here, but almost a month of paid leave is universal across the European Union.

      Strange that you think leisure time doesn't increase employee productivity. Exhausted employees don't work as effectively as content ones.

    10. Re:highest ethical standards by Runaway1956 · · Score: 2, Interesting

      Taking advantage of the highest technological systems in the world, and at the same time exploiting poor peasants who will work for pennies per day just seems terribly unethical. Face it - without the infrastructure provided by past generations of American workers, NONE of today's name-brand manufacturers would be where they are today.

      Think I'm wrong? Fine - take yourself to Africa, with nothing more than you can carry on an airplane and inside your head, and set up shop to compete with Apple.

      What's that you say? You can't find people who are educated highly enough in the fields that you need? You can't find an honest government that will support your endeavor? You can't find logistics? You can't even find a reliable power supply for your plant? Well - imagine that.

      The fact is, various populations around the world have worked for generations to provide the necessary infrastructure for Apple and other corporations to do what they do. Apple (and others) takes full advantage of that infrastructure, and returns little to nothing to maintaining that infrastructure.

      Unethical? Of course it is.

      --
      "Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
    11. Re:highest ethical standards by Sarten-X · · Score: 2, Insightful

      Taking advantage of the highest technological systems in the world, and at the same time providing employment for poor peasants who will work for pennies per day...

      Seems a little different now, doesn't it? All economic exchanges are based on exploiting others. You go to the store, and con the innocent shopkeeper to give you a gallon of milk for only $2. Meanwhile, the shopkeeper sells off one of his many gallons of milk to some schmuck for $2. At the end of the exchange, you both say "thank you", because you both feel like you've gotten the good end of the deal.

      Rural villages in third-world countries making parts for American companies get the money they need to build their own infrastructure. Sure, they're getting paid less than a dollar a day, but the lineman installing electrical service is also getting paid that same rate. Everything just costs less there, for now, so everyone's happy. Except in extreme circumstances, nobody feels that they're getting exploited.

      --
      You do not have a moral or legal right to do absolutely anything you want.
    12. Re:highest ethical standards by Runaway1956 · · Score: 3, Insightful

      Of course it looks different when you change a couple key words. It's called "spin", and it's practiced daily by the newspapers and other media.

      "Providing employment" suggests that people who had nothing can now make purchases, such as housing, automobiles, clothes, etc. In fact, "providing employment" often translates to a marginally better diet, and increased chances of survival. I point to Africa as a prime example. I'm quite sure that you can use Google to locate any number of stories about Gap jeans and other factories located in Africa. If anything, the overall quality of life has been degraded in some of those towns. Entire villages have been overwhelmed with unregulated refuse dumps, and their populations have been reduced to scavenging the dumps for survival.

      China has it's own towns that have been inundated with waste dumps. I saw one set of photos from China of a home that nestled between piles of scrap and refuse, pretty much lost to view from any other home.

      You call it "providing employment", I call it exploitation.

      --
      "Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
    13. Re:highest ethical standards by BasilBrush · · Score: 5, Insightful

      On the wage front, it's fairly orthodox among modern economists to believe that a minimum wage does more harm that good to low income earnings (by making it impossible for many to get a job at all).

      That's not the experience in the UK. They introduced a minimum wage in 1999, and increased it every year. For years after, employment went up, not down. None of the claims that businesses would go bankrupt, or stop employing certain categories of workers turned out to be true.

      For sure there are problems with unemployment now because of the recession caused by the banking crisis. But that isn't caused by the minimum wage.

      If you examine executive pay for public companies, you'll see that companies usually can afford to increase the payroll. It's just that the executives get to decide which part of the payroll to increase, and big surprise, they choose to pay themselves more, rather than increase the wages of the lowest level employees. It takes minimum wage legislation or unions to deal with this problem.

    14. Re:highest ethical standards by Teun · · Score: 2, Informative
      Closed shop is unheard of in Europe.

      There is a constitutional guaranteed freedom to unionise and that freedom would be defective if anyone was forced to join.

      At the moment The Netherlands and Denmark have the lowest unemployment rates in the EU at below 5% and at the same time their unionisation is only about 25% in The Netherlands but 75% in Denmark.

      (Northern) Europeans treat unions with respect and expect the unions to be responsible.

      (That's maybe why the UK is generally not considered part of this elusive Northern Europe :) )

      --
      "The likes of Facebook and WhatsApp are free to those whose privacy is of zero value."
    15. Re:highest ethical standards by Jackie_Chan_Fan · · Score: 3, Insightful

      dont forget 13 suicides + the attempted ones, and the over priced hardware sold in the US.

      Apple is all about raping the people for as much profit as they can get away with.

  3. The Good News by bacon+volcano · · Score: 5, Informative

    Looks like a Global Supply Manager position just became available!

    http://jobs.apple.com/index.ajs?BID=1&method=mExternal.showJob&RID=58206&CurrentPage=7

  4. Apple Manager Arrested In Kickback Scheme by omar.sahal · · Score: 5, Informative

    The indictment describes a scheme in which Devine used his position at Apple to obtain confidential information, which he transmitted to Apple suppliers, including Ang. In return, the suppliers and manufacturers paid Devine kickbacks, which he shared with Ang. The information enabled the suppliers to negotiate favorable contracts with Apple, according to the indictment.

    In case you wanted to know what the scam was, and not read the article.

    1. Re:Apple Manager Arrested In Kickback Scheme by Macrat · · Score: 4, Interesting

      So shouldn't he be complimented for daring to Think Different?

      Actually, it's not that different in Silicon Valley. There's an exec from Fry's Electronics going to jail for doing something similar and blowing it all in Vegas.

  5. Not with Apple by jesseck · · Score: 4, Insightful

    We're talking about the organization that got the SWAT team to take back a stolen iPhone... if they can do that, the fines will probably exceed damages. I can't get an school police officer to look at me with a straight face when I tell them my daughter's Hannah Montana Disney MP3 player was taken on the playground.

    1. Re:Not with Apple by drsmithy · · Score: 4, Insightful

      They are going to use their budget to go after criminals who kill lots of people or do millions in damage first.

      The average cop on the street is not involved in operations involving "criminals who kill lots of people or do millions in damage".

    2. Re:Not with Apple by gtall · · Score: 2, Interesting

      For what it's worth, another anecdotal event, I was burgled a few years ago in Maryland. The cops came, then the next day they sent a detective. They dusted for prints, took notes on what was stolen, etc. 4 months later, they had caught the culprits.

      BTW, I very much doubt you have been "From Texas, to Tennessee, to Oklahoma, to South Carolina, to California and Arizona and New Mexico" and witnessed uselessness from officers.

    3. Re:Not with Apple by UnknowingFool · · Score: 2, Informative

      From my recollection of the events from Gizmodo, the police, with a search warrant, came in and confiscated items on the search warrant. In the report from the Gizmodo editor, no mention of SWAT was mentioned. But please don't let facts get in your way. After a raid with SWAT sounds much more sensational.

      --
      Well, there's spam egg sausage and spam, that's not got much spam in it.
  6. back dated options, anyone? by haystor · · Score: 5, Insightful

    'We have zero tolerance for dishonest behavior inside or outside the company.'

    *cough*
    back dated options
    *cough*

    --
    t
  7. Re:but no zero tolerance for Foxconn? by omar.sahal · · Score: 2, Insightful

    most businesses would probably do the same damn thing.

    What give out confidential information about there own company so their suppliers could get better deals. Or do you mean the suppliers paying the bribes for inside information, that would make more sense; you where't clear.

  8. White iPhone mystery solved? by Ilgaz · · Score: 3, Interesting

    For me, this explains the white iPhone mystery. It wasn't about the "perfect white tone", it was connected to this guy (IMHO who is doomed) and material manufacturers. I always wondered how Apple, the Apple can't get a manufacturer to produce some tone of white for a device people line up for. It happens to small companies/single designers all the time but not to Apple sized companies.

    There was something really mysterious about that white iphone and I think it is connected to this guy and the whole setup.

    I think, as it hasn't been settled silently, this thing will be huge soon. BTW; at first read you think like some "cover designer" companies etc. involved, no they talk about the actual device suppliers.

    1. Re:White iPhone mystery solved? by MichaelSmith · · Score: 2

      Sorry I don't get you on this. Can you clarify what the White iPhone mystery was?

      --
      http://michaelsmith.id.au
  9. Buying a Nokia soon? by Ilgaz · · Score: 5, Interesting

    Nokia is known to be obsessed with environment and living standards of their workers. They are also one of the most truly global thinking companies who cares about cultural diversity.

    Not just that, they purchased Qt from Trolltech and spend millions of engineering hours with millions of dollars to open source their key operating system. That massive work also finds its way to Linux/BSD.

    The point is, seen anyone giving a fsck lately?

    1. Re:Buying a Nokia soon? by X.25 · · Score: 3, Interesting

      Nokia is known to be obsessed with environment and living standards of their workers. They are also one of the most truly global thinking companies who cares about cultural diversity.

      Not just that, they purchased Qt from Trolltech and spend millions of engineering hours with millions of dollars to open source their key operating system. That massive work also finds its way to Linux/BSD.

      The point is, seen anyone giving a fsck lately?

      I know that there are plenty of people living in their small imaginary world, where is everything to them, but there is a real world out there, and it's not playing by geek standards.

      In other words, I bought a Nokia phone yesterday. And I'd never change it for any iPhone/Android/WM phone.

      Also, I don't wear Nike.

    2. Re:Buying a Nokia soon? by sznupi · · Score: 3, Informative

      Nokia actually owns the facilities manufacturing their phones. By far most of dozen of them not in China, half of them in the EU, one even quite close to Cupertino.

      --
      One that hath name thou can not otter
  10. Re:Everything you use are made in Switzerland? by WindBourne · · Score: 3, Informative

    Hmmm. Apple charges top dollars and nobody gripes. Kind of kills your theory. The simple fact is, that every company who has moved their production from USA, EU, and Japan to China have taken a major hit in quality and ppl are tired of it.

    And when I shop, I do look at where it is made at. I have no real issue paying 10-20, even 100% more for better quality products.

    --
    I prefer the "u" in honour as it seems to be missing these days.
  11. Re:Somewhat inevitable? by twidarkling · · Score: 2, Insightful

    While I detest Apple's products and tactics as a company, I don't think they're any more (or less) prone to corruption than any other company. So, either it's specifically and unrealistically Apple-bashing (there's so many better reasons), or it's a condemnation of government intervention in business (the excessive control), or it's a condemnation of EVERY business. All three of those are flamebait/trolling.

    --
    Canada: The US's more awesome sibling.
  12. Re:Somewhat inevitable? by nacturation · · Score: 3, Insightful

    Where there is excessive control, there's plenty of place for corruption/etc.

    So a complete lack of control would lead to few places for corruption? Your argument makes absolutely no sense.

    --
    Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
  13. Check corporate officer pay instead by Anonymous Coward · · Score: 3, Insightful

    "Blaming unions is the easy thing to do" - by CRCulver (715279) on Sunday August 15, @12:02AM (#33254852) Homepage

    Agreed, because corporate officer pay is outrageous in larger corporate bodies (millions per week, and yes, I have seen payrolls in my time the last nearly 17 yrs. as an information systems worker who has done payrolls programming and reporting in numerous organizations). Fact is, quite a few corporate officers' personal pay on an annual INDIVIDUAL BASIS (e.g. CEO) often exceeds the entire payroll outlay of entire smaller companies. This is the insane fact no one ever seems to mention or note, and I often wonder why? Yea, right. We all know why and especially in publicly traded companies. It's because no one really gives a shit in publicly traded companies. It's not like how the Ford family looks over FORD MOTOR COMPANY or how Bill Gates looked after MICROSOFT when he was at the wheel there. They actually gave a damn about how the place is/was run (respectively) because their names and legacy were in their corporations. You don't see that in publicly held/traded companies. All those are is money making machines for stockholders (and mostly for those with preferred stock, such as upper mgt. and board of directors members as a couple examples thereof), and nothing more. So they cut corners like mad in product quality, sell consumers crap with a warranty on it (a warranty on a piece of shit doesn't make it any less of a piece of shit either), and underpay production workers (slaves is more like it) like crazy, those they have not managed to offshore/outsource that is to avoid insurances & higher pay levels that is, which only helps contribute to the erosion of a middle class in the USA so you only have the "haves/big money" and "have nots/no money-poor", which destroys any possibility of an "economy" (Peter buys from Paul, who pays Henry etc. & back around again type symbiosis), and which also makes it impossible to use your so-called "legal rights", because in case you have not noticed? Attorneys co$t, and cost a lot. This is an impossibility for the less fortunate, even though you're told you have legal rights (especially if indigent, unless in a court of law for a crime you're accused of then you get an attorney serving out his "sentence" of having to do a bit of time for society, not that they give a hoot then, though). So if someone slanders you for example? Good luck taking care of it "gratis" even though you have been blatantly wronged and when you have a definite winner of a case and your so-called 'legal rights'. No, the illusion of "equality" and "freedom" in the USA?? It's a pack of thinly veiled lies at best, and the "controllers" (the wealthy in large corporations and banks mostly) know it, and they use it like mad to conceal what is really fascism in the USA, today.

  14. Re:Did he think Jobs wouldn't find out? by Jackie_Chan_Fan · · Score: 3, Informative

    Apple is more well known for being a group of assholes being lead by a super dick.