Orange County Resident Sentenced To Over Four Years In Prison For Scheme To Defraud Multiple Victim Investors
SAN JOSE – Paul S. Devine was sentenced on Dec. 1, 2014, to 12 months and one day in prison, and ordered to pay $4,464,664 in restitution for wire fraud, conspiracy, money laundering, and engaging in transactions in criminally-derived property, announced United States Attorney Melinda Haag, FBI Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon.
According to the plea agreement, Devine admitted that, beginning in approximately February 2007, he engaged in a scheme to defraud Apple of money or property as well as to defraud Apple of its right to his honest services. He also admitted to engaging in a conspiracy with co-defendant Andrew Ang in which they agreed to the fraud against Apple.
Devine had been a Global Supply Manager at Apple from 2005 until he was terminated at the time of his arrest in August 2010. Devine’s job gave him access to confidential internal Apple information. In the course of the scheme, Devine transmitted confidential information, such as product forecasts, pricing targets, and product specifications, to suppliers and manufacturers of Apple parts, including Ang. Ang worked for several Apple suppliers located in Singapore. In return, the suppliers and manufacturers paid Devine kickbacks, including payments determined as a percentage of their Apple contracts. Devine shared the kickbacks with Ang.
In his plea agreement, Devine acknowledged that this scheme deprived Apple of its property right in the confidentiality of its information, its money, and its property, as well as its right to his honest services. 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.
Devine admitted to receiving kickbacks as wire transfers into bank accounts that he opened for that purpose in the U.S. and South Korea, including accounts in the name of a shell corporation, “CPK Engineering.”
Devine also admitted that he knowingly transferred the proceeds of the wire fraud between his various accounts, including CPK Engineering accounts, in order to conceal and disguise the nature, location, source, ownership, and control of the proceeds. He specifically admitted to a May 18, 2010, transfer of $536,748.88 in funds derived from the wire fraud scheme.
Devine agreed that the loss attributable to the fraudulent scheme was approximately $2,409,000, which represented the amount he received in kickback payments. He agreed to forfeit $951,552 in proceeds of the fraud and a vehicle, all of which were seized by the FBI and IRS at the time of his arrest. Devine also agreed to forfeit $612,407 in proceeds of the fraud, which he transferred from overseas bank accounts and deposited with the clerk of the District Court following his arrest.
Devine, 41, of Sunnyvale, was indicted by a federal grand jury on Aug. 11, 2014. The indictment charged him with twenty-three counts related to engaging in the wire fraud scheme, conspiring to commit wire fraud with Andrew Ang, laundering the proceeds of the scheme, and engaging in transactions in funds derived from the scheme.
In a related case, Chua Kim Guan (a/k/a Jacky Chua), an executive at Jin Li Mould of Singapore, was charged by Singaporean authorities with corruptly giving gratifications to Devine. The U.S. indictment against Devine’s co-defendant, Andrew Ang, remain pending.
Devine pleaded guilty on Feb. 28, 2011, to one count of violating of 18 U.S.C. § 1343 (wire fraud), one count of violating 18 U.S.C. § 1349 (conspiracy to commit wire fraud), one count of violating 18 U.S.C. § 1956(a)(1)(B) (money laundering), and one count of violating 18 U.S.C. § 1957 (engaging in transactions with criminally-derived property).
Devine’s sentence was handed down by the Honorable Edward J. Davila, United States District Court Judge. Judge Davila also sentenced Devine to a three-year period of supervised release. Devine will begin serving the sentence on Feb. 19, 2015.
Michelle J. Kane is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Melissa Dorton and Elise Etter. The prosecution is the result of an investigation by the FBI and the IRS, Criminal Investigation.