Jailed: woman who siphoned 25,501 defective iPhones, gained over $3m in profit
SINGAPORE – Over a period of one-and-a-half years, a Singaporean woman conspired with a former colleague based in Malaysia to misappropriate a staggering 25,501 defective iPhones from her employer and sell them to third party buyers overseas, a court heard.
Through her deception, logistics manager Serene Ng Shu Kian, 40, made a whopping $3,115,482.56 in profit, while causing her employer Pegatron Service Singapore to suffer more than US$5,047,350 (about $6,799,790) in losses.
The culprit also used $71,750 of the ill gotten cash as deposit for an apartment at the Treasure at Tampines condominium.
At the State Courts on Monday (11 January), Ng was jailed for 9 years after she pleaded guilty to two charges: criminal breach of trust as an employee involving about US$4,167,700 (about S$5,614,725.44), and using the benefits of criminal conduct.
About the case
Ng began working for Pegatron in October 2014. The company is in the business of providing iPhone repair services for Apple in Singapore and other countries in Asia.
She got to know her accomplice Lim Jen Hee, a 48-year-old Malaysian man, when he worked as an assistant operations manager at the company between June and December 2015.
Ng was in charge of the Logistics Material Department. Its scope included receiving and assigning defective iPhones to repair teams, and then delivering the iPhones to relevant destinations. Ng would update Apple’s inventory and was responsible for submitting closure requests to Apple.
Sometime in late 2017, Ng and Lim conspired to misappropriate defective iPhones by exploiting security gaps in the company’s manual closing process.
“Serene and Lim agreed that they would sell the misappropriated iPhones overseas to third parties, and split the profits amongst themselves. They also agreed that for the initial few months of the scheme (i.e, until 17 May 2018), Lim would keep all the profits for himself, as a way to offset the sum of approximately $100,000 owed by Serene to Lim under a personal loan,” said Deputy Public Prosecutor Tan Zhi Hao.
Modus operandi
Ng would instruct a subordinate to set aside iPhones in a metal cabinet in the logistics office. The phones would be packed in boxes of up to 60 phones, and the subordinate would also raise a delivery order for the phones. Ng would then arrange for the boxes to be collected by a courier company.
To get pass security checks at the Pegatron warehouse, Ng would endorse the delivery orders personally and mark them as “OEM returns”. The misappropriated phones would be delivered to a Malaysian address provided by Lim. After these phones were sent to Malaysia, Ng would raise closure requests for the cases to be closed manually to avoid Pegatron or Apple detecting the unauthorised loss of the phones.
Lim would then liaise with buyers overseas to sell the phones and distribute the profits between himself and Ng. Initially, the profit would be shared equally among the co-conspirators. “As the scheme progressed, Serene negotiated for a higher percentage of the profit share, from 50 per cent up to 60 per cent, as she felt that she ‘did most of the job’,” said DPP Tan.
The crimes came to light when three auditors from Apple’s compliance and security team conducted a surprise audit check on Pegatron on 21 May 2019, and discovered that there were unaccounted iPhones in its inventory. Three days later, Pegatron’s general manager made a police report.
Ng has not made any restitution to date. On 10 June last year, Pegatron began civil proceedings in the High Court to seek damages from Ng in respect of the loss caused by her crimes. The next day, the company obtained an injunction order prohibiting her from disposing her assets in Singapore, including on the deposit paid to condominium developer Sim Lian (Treasure). Pegatron obtained default judgement against Ng on 1 August last year, with the quantum of damages to be assessed later.
For criminal breach of trust as an employee, Ng could have been jailed for up to 15 years and also fined.
The maximum punishment for using criminal proceeds is a fine of up to $500,000 and a jail term of up to 10 years.
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