Where an Apple Employee Hid Fraud/IP Spoils: Stuffing Cash Into Shoeboxes From Supplier Payouts

Apple, perennially coming in at the top of AMR's supply chain rankings, must have been alarmed to learn that one of its well-paid employees -- global supply managers at high-tech firms should all be into the six figures, especially those based in the Bay area -- was able to stash quite a few bills away in shoeboxes for himself from selling information to suppliers. The employee, who "was arrested and charged with selling secrets to Asian suppliers in exchange for over $2 million in kickbacks" allegedly stashed "over $150,000 in cash in shoe boxes in his home." While reading this story, I became fixated on the $150K shoebox number, and what it means for procurement organizations as a warning to police their brethren more closely.

When people turn to putting money in shoeboxes -- provided they're not over 90 years old -- it's usually because they're holding money until they can launder or spend it. Keeping it outside of a bank prevents any authorities from knowing that it's even there. This type of behavior is especially disconcerting in someone we'd trust to spend our corporate dollars, who then turns around to provide trade secrets to suppliers -- especially considering it's highly unlikely it was the economy that prompted him to take action (he would have most likely found a way to spend the money if he had to). In other words, the Apple employee stole for a reason other than perceived financial necessity.

As the economy gets worse, we must all remain even more vigilant when it comes to fraud. A couple of weeks back when this story was breaking) I offered up a few suggestions for screening potential employees more to identify potential fraudulent tendencies -- or at least to weed those out who might not have a value system that's in line with the norm. At least one reader thought my suggestion (one at the very least) was outrageous. Yet I'd like to think that as more examples like the Apple incident surface, that we'll all take a closer look at the moral and ethical standards we support and require from those around us.

Jason Busch

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