It has been revealed that Paul Shin Devine, a global supply manager at Apple, and Andrew Ang, of Singapore, were named in a 23-count federal grand jury indictment for wire fraud, money laundering and kickbacks in grand jury documents unsealed on Friday, along with a separate civil suit.

According to The San Jose Mercury News, Mr. Devine may have received as much as $1 million over the past few years from Apple supply chain partners as he gave them information that enabled them to negotiate more favorable contracts with his employer.  According to the newspaper:

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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.

Apparently the two gentlemen used a network of foreign bank accounts and a fake business named CPK Engineering to facilitate the payments, and all of the funds were referred to as “samples” so that none of Mr. Devine’s coworkers would catch on to what he was doing.  The accounts were opened in Asian countries, some of them under his wife’s name, and he would receive the kickbacks in person when he traveled overseas on business.

Steve Dowling, a spokesman for Apple, told the newspaper, “Apple is committed to the highest ethical standards in the way we do business. We have zero tolerance for dishonest behavior inside or outside the company.”

While no companies were named in the documents, they appear to have been parts suppliers for iPhone and iPod products, and are located in multiple Asian countries.

Mr. Devine is currently in the custody of the U.S. Marshall’s Service, no information was provided as to the current whereabouts of Mr. Ang.  A hearing is scheduled for Mr. Devine on Monday in a San Jose court.

While this is a sad turn of events, it is unfortunately not that unheard of.  This practice is probably as old as business itself, but of course that doesn’t make it right.

What say you?  Are you surprised by this?