SAN JOSE, Calif. (KRON) — A former Apple employee has pleaded guilty to mail and wire fraud after he successfully swindled the company out of more than $17 million, according to a statement from the California Department of Justice.
Dhirendra Prasad, 52, of Mountain House, pleaded guilty in federal court on Tuesday to charges of conspiracy to commit fraud and conspiracy to defraud the United States. These charges were in connection to a series of schemes that Prasad led in order to defraud his then-employer Apple, Inc.
According to Prasad’s plea agreement, he worked for Apple from 2008-2018 as a buyer for Apple’s Global Service Supply Chain. Prasad was responsible for buying parts and services for Apple from various vendors.
Prasad says he began to defraud Apple back in 2011 by taking kickbacks, inflating invoices, stealing parts and charging Apple for services the company never received. Prasad told prosecutors that the schemes continued through 2018 and cost the company upwards of $17 million.
In the plea agreement, Prasad also admitted that his co-conspirators included Robery Gary Hansen and Don M. Baker, both residents of the Central District of California. Prasad told prosecutors that Hansen and Baker owned vendor companies which engaged in business with Apple. The two co-conspirators were charged in separate federal cases, and the pair have also admitted that they were involved in the schemes.
Prasad’s Fraud Schemes
Prasad told prosecutors that back in 2013 he had motherboards shipped from Apple to Baker’s company, CTrends. Baker then arranged to harvest the motherboards’ parts while Prasad requested that Apple issue purchase orders for those parts.
Baker then shipped the harvested parts back to Apple while CTrends submitted invoices to Apple. This meant that Apple was paying the company for parts it already owned. Prasad would ensure that Apple paid, then he and Baker would split the profits.
In another example from 2016, Prasad says he arranged to have parts shipped from Apple to a Nevada warehouse attached to co-conspirator Hansen’s business called Quality Electronics Distrubutors, Inc.
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Hansen would intercept the parts, remove them from their packaging, place them in new packaging and then ship them back to Apple’s warehouse. Prasad said he created purchase orders for the pieces, and Hansen would then submit an invoice to Apple, again causing the company to pay for its own parts. The pair would then split the profits from the fraud.
Prasad says he also engaged in tax fraud by funneling illicit payments from Hansen over to Prasad’s creditors. He also arranged for a shell company to give out fake invoiced to CTrends to conceal Baker’s illicit payments to Prasad. This also allowed Baker to claim hundreds of thousands of dollars in unjustified tax deductions. This cost the Internal Revenue Service more than $1.8 million in losses.
What happens for Prasad now?
The U.S. put in place a civil forfeiture action which requires Prasad forfeit all assets that he acquired with fraudulent proceeds, including multiple properties. The assets have an approximate value of $5 million. On Tuesday, Prasad agreed he would forfeit all assets.
Prasad pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud which can carry a maximum sentence of 20 years in prison. Prasad also pleaded guilty to one count of conspiracy to defraud the U.S.; this carries a maximum sentence of five years.
Prasad will face a judge in a sentencing hearing scheduled for March 14, 2023. He will remain out of custody until his sentencing hearing.