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Apple manager charged for money laundering

by Sarah Griffiths on 16 August 2010, 14:39

Tags: Apple (NASDAQ:AAPL)

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Secret stash

An Apple manager has been indicted by a Californian jury for money laundering and wire fraud, relating to making some cash by disclosing iPhone and iPod secrets.

According to the WSJ, Paul Devine, a global supply manager at Apple, is said to have squirreled away more than $1m in kickbacks from Asian suppliers of iPhone and iPod accessories, which are believed to include: Korea's Cresyn, China-based Kaedar Electronics and Singapore's Jin Li Mould Manufacturing.

Devine is accused of passing on secret data about Apple's products to the suppliers in return for cash, giving them a heads-up on iPhone and iPod details to help them win better contracts with Apple and beat their rivals. He is also believed to have shared some of the spoils with another man called Andrew Ang who has also been charged.

According to Californian local paper the San Jose Mercury, Devine is in custody and is expected to appear in court later today.

He is accused of using a whole bunch of domestic and foreign bank accounts to stash the kickback cash with one front company to take the payments, the newspaper reported.

In a statement, Steve Dowling, a spokesman for Apple reportedly said the firm has: "zero tolerance for dishonest behavior inside or outside the company."

Meanwhile, as well as having problems with wayward employees, Apple's newly released iAd mobile advertising service is experiencing teething problems, with some ad execs grappling with the new heavily-policed system resulting in delays to campaigns, The Wall Street Journal reports.

Several advertising execs told the newspaper some marketers are finding it tricky to get iAds online quickly because of Apple's controls on creative aspects of the adverts, making the development of such adverts hard work and slower than if they were made in-house.

iAds are reportedly taking between 8 to 10 weeks to complete, while the physical building of the ad, which is handled by Apple, has been known to take a fortnight longer than companies were promised.  

Since its launch in July, Apple has reportedly been slow to get more companies involved, with only Nissan and Unilever rolling out campaigns in July. Apple signed up 17 launch partners and only Walt Disney, Citigroup and US department store JC Penney have launched iAds in August. In fact one of the launch companies, Chanel, reportedly does not have an iAd campaign planned at all.

The iAd platform was designed to plant interactive adverts in iPhone apps and make Apple some money from free applications, with the developers rumoured to receive 60 percent of the revenue. The significant cut of the spoils was intended to foster developer loyalty to Apple but Google has recently launched AdMob and there are other services offering similar incentives.