Apple Supplier Says It Paid 'Brokerage Commission' To Indicted Apple Employee

The parent company of one of six companies mentioned in a U.S. grand jury indictment of an Apple employee who allegedly received kickbacks from those companies for providing them insider information said it made payments, but did not say to whom.

The Wall Street Journal on Monday reported that Pegatron Corp. has admitted that Kaedar Electronics, which it acquired in late 2008, paid a "brokerage commission" to an intermediate trading company related to business it did with Apple between 2005 and 2008.

However, Pegatron said it was not sure if the employee named in the indictment, Paul Shin Devine, was actually connected to that intermediate company.

Devine is alleged to have received hundreds of thousands of dollars in kickbacks from six Asian suppliers to Apple in return for confidential information that could help those suppliers negotiate favorable contracts with Apple, according to the indictment.

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Devine, a global supply chain manager at Apple, was charged in a federal grand jury indictment on Aug. 11 and was also named in a civil suit filed in U.S. District Court in San Jose, Calif.

A copy of the actual indictment can be read on the San Francisco Weekly's website.

A total of six companies are alleged to have paid kickbacks to Devine via CPK Engineering, a California-based company that Devine controlled separately from his employment at Apple, according to the indictment.

The indictment lists those six as "Company A" through "Company F."

They include a South Korea-based assembler of headsets for Apple's iPhone and iPod; a Singapore-based company which manufactured parts for Apple headsets; a Singapore-based company which supplied parts for Apple iPods; a Chinese company that did molding for Applie iPod accessories; a Singapore company which manufactured parts for Apple products; and a Taiwan company which manufactured parts for Apple headsets.

In addition to Devine, a second person, Andrew Ang, was also indicted. Ang, a Singapore citizen, either worked for or represented the Singapore companies mentioned in the indictment.

According to The Wall Street Journal, a Pegatron spokesperson said that his company is investigating the alleged kickbacks, which occured before it acquired Kaedar in late 2008. Kaedar supplied iPod packing boxes to Apple, the Journal reported.

The spokesperson said that Pegatron did not pay any individual directly.

The Journal also reported that Pegatron is a spin-off of Asus, which is an apple contractor.