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Former Apple manager pleads guilty to wire fraud, money laundering in kickback scheme

March 1, 2011 | 10:22 am

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A former Apple manager pleaded guilty on Tuesday to wire fraud, conspiracy and money laundering, federal authorities said.

Paul Devine entered his plea in a San Jose Federal Courthouse, and also agreed to forfeit $2.25 million in kickbacks he received from Apple suppliers, according to a statement from the Federal Bureau of Investigation.

Devine, from Sunnyvale, Calif., was employed by Apple from 2005 to 2010 and during that time gave overseas iPhone and iPod suppliers information on future Apple products, pricing targets and product specifications in exchange for payments, U.S. Atty. Melinda Haag in San Francisco said in a statement.

The kickback payments were sometimes paid out to Devine as a percentage of the business the foreign companies did with Apple, Haag's statement said.

"The scheme enabled the suppliers and manufacturers to, among other things, negotiate more favorable contracts with Apple than they would have been able to obtain without the confidential information," the U.S. attorney's office said.

The investigation into Devine's illegal activities began in April 2010, when Apple found evidence of the kickback payments on his Apple-owned laptop. Devine, 38, was indicted last August.

Devine, 38, also admitted to transferring money he received in the kickback payments between various bank accounts in the U.S. and overseas in an attempt to conceal the scheme, the FBI said.

Sentencing is scheduled for June 6 and until then, Devine is on pretrail release, the FBI said. He faces up to 50 years in prison and as much as $1 million in fines, the FBI said.

As part of his guilty plea, Devine has agreed to pay restitution as ordered by the court in addition to the $2.25 million he's already agreed to forfeit.

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-- Nathan Olivarez-Giles

Twitter.com/nateog

Photo: Apple headquarters in Cupertino, Calif. Credit: Paul Sakuma / Associated Press

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