Pre-Order your new iMac now from MacMall (ships Oct 23) & save hundreds in tax: Apple Price Guides updated Oct 18th (exclusive coupons)
 


Monday, September 13, 2010, 07:30 am PT (10:30 am ET)

Apple manager charged in kickback scheme agrees to protect secrets

The Apple manager accused of taking kickbacks in exchange for company information has agreed to keep secret company information from being publicly disclosed through an ongoing criminal case.

Paul Devine agreed to a protective order put together by the U.S. Attorney's Office in San Francisco, Calif., last week, according to Bloomberg. The prosecution noted that discovery in the case against the Apple employee could produce material "that is intended to be kept secret and is trade secret information."

"Devine agreed to procedures about how the data will be handled during pretrial bargaining, without giving up his right to challenge how such information may be used at trial, according to court documents," the report said.

Devine, 37, was arrested in August and charged with accepting more than a million dollars in kickbacks from Asian suppliers. He has pleaded not guilty.

Investigators in the case found that Devine had stashed more than $150,000 in shoe boxes in his home. The prosecution has alleged that the Apple manager used his security clearance to provide confidential information to Apple's overseas suppliers, which then used the information to negotiate favorable contracts.

In addition to the criminal trial — in which Devine has been charged with wire fraud, kickbacks and money laundering — he also faces a civil suit from Apple. A judge last month determined that Devine would be a potential flight risk if he was let out on bail before turning over the cash he received, much of which is said to be in overseas bank accounts.

Devine's arrest caused a stir with Apple's overseas suppliers, including Pegatron, which suspended an executive that was linked to the kickback scheme. Pegatron was allegedly not involved in the scam, but it since acquired Kaedar Electronics, which 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.

In addition, officials with Cresyn said their company met with Devine in 2006, and the Apple supply manager reportedly offered consulting services to aid in negotiations with Apple. Cresyn, which supplies earbuds that ship with Apple's iPods, 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."