Apple supply chief faces corruption charges

17 August 2010

17 August 2010 | Angeline Albert   

A global supply manager at Apple has been arrested on criminal fraud charges and is simultaneously being sued by the technology giant for allegedly taking more than $1 million in bribes from component suppliers.    

Paul Devine was arrested on Friday, following a joint investigation by the Internal Revenue Service and the FBI. Apple, which began its own inquiries in April this year, filed a civil suit against Devine the same day (13 August).   

He appeared in the US District Court for the Northern District of California in San Jose yesterday (Monday, 16 August) and pleaded not guilty to the charges against him.

Devine began working for Apple in July 2005 with responsibility for managing relationships with suppliers to procure components for iPod music players and related accessories. Apple alleges that he gave supplier firms confidential information “to help them secure lucrative supply agreements with Apple or otherwise benefit their business interests”.

In civil court papers, Apple accused Devine of “abusing his position, violating Apple policies and breaking the law by stealing Apple’s proprietary, trade secret and other confidential information and converting it to his own benefit”.

The company alleges Devine’s targeted suppliers were able to negotiate offers that were more favourable to the vendors than to Apple.   

In court papers the company says: “Devine’s actions, which were concealed from Apple for several years, undermined Apple’s procurement process.”

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