Ex-Apple employee owes $19 million for elaborate fraud scheme
A former Apple employee will go to prison for a scheme that defrauded the Bay Area-based tech giant of more than $17 million, and he has been ordered to pay for what he stole.
Dhirendra Prasad received the three-year prison sentence Wednesday in federal court after pleading guilty to charges of conspiracy to commit mail and wire fraud, as well as a charge of conspiracy to defraud the United States. The San Jose judge also ordered Prasad to forfeit millions of dollars’ worth of assets and pay restitution: $17,398,104 to Apple and $1,872,579 to the Internal Revenue Service.
Prasad, who lived in Mountain House, a small town on the western edge of San Joaquin County, said in his November plea agreement that he was employed at Apple from 2008 through 2018, mostly as a parts buyer for Apple’s supply chain — working with vendors to get parts and services for the tech giant.
In 2011, Prasad started to defraud his employer, he said in his plea agreement. He used his role to make Apple pay for items and services the company would never receive, and defrauded the company by inflating invoices, stealing parts and taking kickbacks. The schemes continued through 2018, and cost Apple more than $17 million.
Prasad named two co-conspirators, Robert Gary Hansen and Don M. Baker, both of whom operated vendor companies that did business with Apple. They each admitted their involvement in the crimes, according to the U.S. Attorney’s Office for the Northern District of California.
Baker was central to a 2013 scheme in which Prasad shipped motherboards belonging to Apple to Baker’s company in Orange County. After Baker had the tech’s components harvested, Prasad had Apple buy the harvested parts, the U.S. Attorney’s Office said. When Baker’s firm billed Apple for its own hardware, he and Prasad split the proceeds, according to the news release.
In another scheme in 2016, Prasad arranged a shipment of Apple parts to the company owned by Hansen, who sold the parts back to Apple through Prasad. Again, Apple paid up and the co-conspirators split the proceeds.
The U.S. Attorney’s Office for the Northern District of California wrote in a statement that Prasad “was given substantial discretion to make autonomous decisions to benefit his employer.”
“Prasad betrayed this trust, and abused his power to enrich himself at his employer’s expense — all while accepting hundreds-of-thousands of dollars’ worth of compensation from Apple in the form of salary and bonuses,” the statement continues. “Additionally, Prasad used his insider information regarding the company’s fraud-detection techniques to design his criminal schemes to avoid detection.”
Prasad also admitted to making illicit payments to his creditors and using a shell company to avoid paying taxes — the $1.8 million sum he now owes as restitution to the IRS.
The ex-Apple employee’s mail and wire fraud charge carries a maximum sentence of 20 years in prison, but the judge opted to sentence him to three years behind bars, three years of supervised release after his term, asset forfeitures and the restitution payments. Apple did not respond to an SFGATE request for comment.
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Source: SFGATE
