Ex-employee of Apple owes 19 million dollars for extensive 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 in federal court on Wednesday 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 by Apple from 2008 to 201[ads1]8, primarily as a parts buyer for Apple’s supply chain — working with suppliers for to get parts and services for the technology giant.

In 2011, Prasad began defrauding his employer, he said in his plea agreement. He used his role to get Apple to pay for goods and services the company would never receive, defrauding the company by inflating invoices, stealing parts and taking returns. The schemes continued through 2018, costing Apple more than $17 million.

Prasad named two co-conspirators, Robert Gary Hansen and Don M. Baker, who both ran supplier companies that did business with Apple. They each admitted their involvement in the crimes, according to the US Attorney’s Office for the Northern District of California.

Baker was central to a 2013 scheme in which Prasad sent Apple motherboards to Baker’s company in Orange County. After Baker harvested the technology’s components, Prasad had Apple buy the harvested parts, the U.S. attorney’s office said. When Baker’s company billed Apple for its own hardware, he and Prasad split the revenue, according to the press 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 and the co-conspirators shared the proceeds.

The U.S. attorney’s office for the Northern District of California wrote in a statement that Prasad “was given considerable discretion to make autonomous decisions for the benefit of his employer.”

“Prasad betrayed that trust, abusing his power to enrich himself at his employer’s expense — while accepting hundreds of thousands of dollars in compensation from Apple in salary and bonuses,” the statement continues. “Additionally, Prasad used his inside information regarding the company’s fraud detection techniques to devise his criminal schemes to avoid detection.”

Prasad also admitted making illegal payments to his creditors and using a shell company to avoid paying taxes — the $1.8 million he now owes in restitution to the IRS.

The former Apple employee’s mail and wire fraud charges carry a maximum sentence of 20 years in prison, but the judge chose to sentence him to three years behind bars, three years of supervised release after his term, asset forfeiture and restitution payments. Apple did not respond to an SFGATE request for comment.

Have you heard of anything happening at Apple or another technology company? Contact tech reporter Stephen Council safely at or at Signal at 628-204-5452.

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