Within three years of starting work at Apple in 2008, Dhirendra Prasad was defrauding the company, and over the next decade he scammed the Cupertino iPhone maker out of more than $17 million, federal authorities said after the 52-year-old pleaded guilty Tuesday.
Prasad, of Mountain House in San Joaquin County, California, spent most of his time at Apple in the company’s Global Service Supply Chain department, as a buyer of parts and services, according to the U.S. Justice Department. Prasad used “multiple schemes” to defraud his employer, federal officials said.
“Prasad admitted he began to defraud Apple as early as 2011 by taking kickbacks, inflating invoices, stealing parts, and causing Apple to pay for items and services never received,” the department said in a press release.
The more than $17 million in losses to Apple is substantially higher than the department specified in a March press release after Prasad was charged, when the size of the fraud was pegged at more than $10 million.
The former Apple worker conspired with two other California men, Robert Gary Hansen and Don M. Baker, who owned companies that did business with Apple, the department said. Hansen and Baker were charged in separate federal criminal cases and admitted involvement in the schemes.
Prasad, in a plea agreement submitted in writing to U.S. District Court in San Jose, admitted that in 2013, he had computer circuit boards shipped from Apple to Baker’s company CTrends, where Baker arranged to have the boards’ components “harvested.” Then Prasad arranged for Apple to issue purchase orders for the components, according to the DOJ.
“Baker shipped the harvested components back to Apple, and CTrends submitted invoices to Apple, thus billing Apple for its own components,” the department said. “Prasad caused Apple to pay the fraudulent invoices, and Baker and Prasad thereafter split the proceeds of the fraud.”
In another example of fraud highlighted by federal authorities, Prasad in 2016 arranged for shipments of Apple components to Hansen’s company, Quality Electronics Distributors. Hansen allegedly repackaged the goods and shipped them back to Apple. Prasad created purchase orders for the components, and Hansen submitted invoices for them to Apple, “thus billing Apple for its own components,” the department said. As with the scam involving CTrends, Prasad had Apple pay the invoices, and he and Hansen split the money.
Prasad also admitted to perpetrating tax fraud by funneling payments to his creditors from Hansen, and also used a shell company to issue fake invoices to CTrends in order to conceal Baker’s payments to Prasad and allow Baker to claim hundreds of thousands of dollars of unjustified tax deductions. Those schemes cost the Internal Revenue Service $1.8 million, the department said.
The former Apple worker agreed to forfeit $5 million in assets obtained via his fraud, including several properties and “numerous financial accounts,” according to the DOJ.
Prasad pleaded guilty to one count of conspiracy to commit fraud, which carries a maximum sentence of 20 years in prison, as well as one count of conspiring to defraud the U.S. government, which carries a maximum sentence of five years. However, sentencing guidelines and judges’ discretion mean most people convicted of fraud in federal court receive less than the maximum sentence.
Prasad’s sentencing is scheduled for March 14. Court records show he is out of custody on a promise to pay $250,000 if he breaks the conditions of his release.
