April 28, 2023

This week, a Judge in San Jose, California, sentenced Dhirendra Prasad to serve three years in prison. He was also asked to pay $19 million “for conspiring to defraud Apple,Inc., of millions of dollars and for related tax crimes,” the Department of Justice (DOJ) said in a statement.

In November, Prasad pled guilty to criminal charges of mail and wire fraud and for “conspiracy to defraud the United States.” The government seized $5.5 million of his assets. Prasad, 55-years-old, is a resident of Mountain House, California. His prosecution resulted from an investigation led by the U.S. tax agency, the Internal Revenue Service (IRS).

Prasad was employed at Apple from December 2008 through December 2018, mainly as a buyer in Apple’s Global Service Supply Chain. His job was to facilitate the process through which Apple bought parts to perform warranty repairs on older devices.

He “conspired with two separate vendors to defraud Apple by taking kickbacks, stealing parts, inflating invoices, and causing Apple to pay for items and services it never received – resulting in a loss to Apple of more than $17 million,” the DOJ said in a statement.

Prosecutors cited two examples: Prasad shipping motherboards, in 2013, and components, in 2016, both from Apple’s inventory, to two separate Apple suppliers. The suppliers shipped the parts back to Apple and billed Apple for items from its own inventory. “Prasad caused Apple to pay the fraudulent invoices,” according to the DOJ statement. He then split the proceeds from Apple’s bill payments with the supplier.

Prasad also acknowledged that he evaded tax on the proceeds of his schemes. He did this, the DOJ states, “by funneling illicit payments” from one supplier directly to Prasad’s creditors. In the case of the other supplier, Prasad set up a shell company to issue sham invoices to conceal illicit payments he received which also enabled the supplier “to claim hundreds of thousands of dollars of unjustified tax deductions.”

Prasad admitted to the DOJ that he began to defraud Apple as early as 2011 and that the schemes continued through 2018. Both suppliers have admitted their involvement in the schemes.

In addition, “Prasad used his insider information regarding the company’s fraud-detection techniques to design his criminal schemes to avoid detection,” the DOJ noted. While enriching “himself at his employer’s expense” Prasad received hundreds-of-thousands of dollars in salary and bonus from Apple.

Earlier, Prasad reportedly worked as a buyer at Solectron and Flextronics and as a supply base manager for Proxim Wireless and Riverbed Technology.

Along with the three-year prison sentence, the Judge ordered Prasad to pay $8 million, in addition to the $5.5 million seized. He is also required to pay $17 million to Apple and, for tax evasion, $1.9 million to the IRS.   

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