14 DAY TRIAL // Accused in a civil suit by Apple of taking more than $1m in kickbacks from Asian suppliers, Paul Devine pleaded not guilty during a hearing in San Jose federal court on Monday, and was returned to jail thereafter.
Citing a report by the San Jose Mercury News, Softpedia reported last week that a a mid-level Apple manager had been arrested on Friday, after being charged with selling company secrets to more than half a dozen Asian hardware suppliers.
The Financial Times now reports that said suppliers allegedly profiting off Paul Devine’s leaks have denied any wrongdoing.
One Taiwanese company said it suspended a manager throughout the course of investigation.
However, Apple’s suit alleges that Kaedar Electronics, a unit of Taiwan’s Pegatron, and Cresyn of South Korea, benefited greatly from leaked information coming from Mr Devine.
Talking about Cresyn’s practices in particular, Apple said the company and Mr. Devine signed a “consulting services agreement” which contained instructions on what Mr Devine was supposed to leak.
The information included Apple product roadmaps and sales forecasts, for which Devine would receive the alleged sum of $6,000 in monthly payments.
However, Cresyn said the payments could not be considered bribery, as Mr. Devine had been contracted by the company to receive information about trends in the US market.
“An Apple manager offered to provide us with business consulting to help us advance into the US market. So we signed a normal consulting contract, which was not illegal,” Cresyn said in a statement, according to FT.com. “We received general information about the US market but did not receive any technology-related information.”
As far as Pegatron is concerned, an internal investigation has led to the suspending of a Kaedar manager believed to be involved in the case. Pegatron is the world’s biggest manufacturer of computer motherboards, the report notes.
However, recent reports indicate that Pegatron has confirmed that its subsidiary did pay kickbacks to an "intermediate trading company" in order to help land favorable contracts between 2005 and 2008.
Mr Devine reportedly became a suspect when Apple found incriminating e-mails from Mr Devine on his work laptop.
These e-mails, sent on personal accounts, allegedly instructed his benefactors to avoid attracting attention by not to wiring more than $10,000 at a time.
As noted in our Saturday report, Devine reportedly referred to the pay-offs as “samples”.
It seems that earning more than $100,000 in average annual salary from Apple, plus having stock and options, was not enough for Devine, going by suit filings.
In order to take the kickbacks, the Apple staffer reportedly set up a California company and opened bank accounts in his wife’s name.
The indictment says he was able to transfer more than $500,000 in illicit proceeds.
Prosecutors said that Devine should not be granted bail, arguing that that her remained a flight risk. Another hearing on the bail question is scheduled for Wednesday.