Tuesday, August 24, 2010, 12:00 pm PT (03:00 pm ET)
Apple manager charged in kickback scheme stashed $150K in shoe boxesPaul Devine, the Apple supply manager charged with accepting kickbacks from overseas partners, allegedly had more than $150,000 in cash stashed in shoe boxes in his home when it was raided by federal agents.
Federal prosecutors in the case against Devine revealed the massive horde of cash in court this week, according to IDG News Service. Devine also reportedly had an additional $20,000 in foreign currency, and prosecutors said it's possible that the man has other hidden money.
U.S. Magistrate Judge Howard Lloyd said that Devine must transfer the unknown sum of cash he has in foreign bank accounts and post it, plus $600,000 in bail, before he can be released from prison. Department of Justice Attorney Michelle Kane would only say that the investigation had found "a significant number of overseas accounts and a significant amount of money," but did not give an exact sum.
The judge determined that Devine represents a potential flight risk if he is let out on bail before the foreign funds have been moved into the U.S.
Earlier this month, Devine, 37, was arrested and charged with wire fraud, kickbacks and money laundering. Prosecutors have alleged that the Apple global supply manager used his security clearance to provide confidential information to the hardware maker's suppliers. Apple's partners then allegedly used the information to negotiate favorable contracts with Apple, and, the prosecution says, paid kickbacks to Devine.
Devine is accused of accepting more than a million dollars from Asian suppliers. He pleaded not guilty to charges last week. He has also been charged with a civil suit by Apple.
Devine's lawyer reportedly said his client may not be able to transfer all of his money into the U.S. because of the logistics of foreign fund transfers. Devine must also allow the authorities to inspect two safety deposit boxes that he holds, and he and his wife must surrender their passports to the court.
Devine's arrest has sent shockwaves through Apple's overseas suppliers, as Pegatron last week suspended an executive that was linked to the kickback scheme. Though Pegatron was allegedly not involved in the scam, it had since acquired Kaedar Electronics, which, Pegatron admitted, paid a brokerage commission to an intermediate trading company — not an individual — between 2005 and 2008. Kaedar has supplied iPod packing boxes to Apple since 2005.
Officials with another overseas, supplier, Cresyn, said their company met with Devine in 2006, and said the Apple supply manager offered consulting services to aid in negotiations with Apple. Cresyn has said it believes it made a "legal contract" with Devine, in which it paid a consulting fee in exchange for "general information about U.S. markets." Cresyn has supplied the ear buds that ship with Apple's line of iPods.
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