Six Former Apple Employees Charged with Defrauding Charity Donation Program

In a shocking case of fraud, six former Apple employees have been charged with stealing over $150,000 by exploiting Apple’s charity donation matching program. The scheme, which spanned three years (July 2018 to April 2021), involved fake donations to children’s charities, enabling the accused to pocket the funds intended for charitable causes.

The Scheme: How It Unfolded

The alleged ringleader, Siu Kei (Alex) Kwan, manipulated Apple’s Matching Gifts Program by:

1. Encouraging his colleagues to make fake donations to two organizations:
   • Hop4Kids (where Kwan served as CEO).
   • American Chinese International Cultural Exchange (ACICE) (where he worked as an accountant).
2. Reimbursing the employees for their fake donations while collecting Apple’s matching funds.
3. Misusing the scheme to claim false deductions on tax returns, reducing their tax bills further.

Apple’s Matching Gifts Program, managed through the platform Benevity, allowed employees’ contributions to eligible charities to be matched 100% or 200%. Once matched, the funds were transferred directly to the charities. However, Kwan exploited the system, diverting the matched donations for personal gain.

The Accused and Charges

The following six individuals are facing serious felony charges:

1. Siu Kei (Alex) Kwan, 37 (Castro Valley)
2. Yathei (Hayson) Yuen, 34 (San Jose)
3. Yat C (Sunny) Ng, 35 (Milpitas)
4. Wentao (Victor) Li, 38 (Hayward)
5. Lichao Ni, 39 (Sunnyvale)
6. Zheng Chang, 31 (Union City)

The charges include:

• Grand theft
• Conspiracy
• Perjury
• Tax fraud

Due to the large sums involved, the case includes white-collar crime enhancements, which could lead to severe penalties, including jail time, restitution payments, and hefty fines.

Apple’s Role and Investigation

Apple, credited for uncovering the fraud, brought the matter to light and cooperated fully with the investigation. District Attorney Jeff Rosen commended the company’s swift action and urged other tech organizations to remain vigilant against such fraudulent schemes.

The Santa Clara County District Attorney’s Office has issued arrest warrants for all six defendants, and the investigation is still ongoing.

Impact and Lessons Learned

This case underscores the importance of robust internal controls and monitoring systems in corporate programs. Fraudulent activities like these not only harm companies financially but also undermine trust in charitable initiatives.

Key Takeaways for Companies:

1. Implement Strong Oversight: Regular audits of donation matching programs.
2. Verify Donations: Cross-check receipts and charity legitimacy.
3. Employee Training: Educate staff on ethical behavior and consequences of fraud.

Conclusion

The fraud committed by these former Apple employees highlights vulnerabilities in even the most well-intentioned corporate programs. With over $152,000 misappropriated, this case serves as a cautionary tale for businesses to enhance their internal checks and balances. As the investigation continues, the tech industry is reminded of the importance of maintaining transparency and integrity in charitable programs.