Jail for man who misappropriated 25,000 defective iPhones, causing company to lose over $6 million

Shaffiq Alkhatib
The Straits Times
July 12, 2023

A former assistant operations manager was sentenced to nine years’ jail on Wednesday for working with an accomplice to misappropriate more than 25,000 defective iPhones.

Lim Jen Hee’s offences caused a loss of more than US$5 million (S$6.7 million) to his then employer Pegatron Service Singapore, which was contractually obliged to compensate Apple.

At the time of the offences, Pegatron was in the business of providing iPhone repair services to Apple in Singapore and other countries in Asia.

Lim, a 51-year-old Malaysian, was convicted in May of two counts of criminal breach of trust.

Lim, who worked for Pegatron between June and December 2015, committed the offences with Ng Shu Kian, also known as Serene. She was the company’s logistics manager at the time.

In earlier proceedings, Deputy Public Prosecutor Tan Zhi Hao said that by committing the offences, the Singaporean woman earned more than $3.1 million in profit, while Lim earned about $3 million.

Ng, then 40, was also sentenced to nine years’ jail in 2021, after she pleaded guilty to offences including two counts of criminal breach of trust.

The offences were committed over more than 100 occasions between Jan 31, 2018, and May 15, 2019.

Lim was in charge of the production team at Pegatron, while Ng was in charge of its logistics material department.

DPP Tan had said that the production team received defective iPhones from the logistics material department and would inspect the devices to check their condition and functionality.

The production team might also conduct minimal repair work on certain models of iPhones.

After conducting the inspection and repair work, if any, the production team would then pack and return the iPhones to the logistics material department, which would be responsible for them.

Court documents stated that in late 2017, Lim found a buyer in Malaysia who was willing to purchase the devices.

Ng and Lim then agreed on a scheme to misappropriate the defective iPhones by exploiting security gaps in the company’s manual closing process.

Neither Pegatron nor Apple would realise that there were missing iPhones in Apple’s inventory.

Ng and Lim agreed that they would sell the misappropriated iPhones overseas to third parties, and split the profits between them.

As part of the scheme, Ng told one of her then subordinates to charge the battery of each iPhone she received from the repair team.

The unsuspecting woman was also told to set aside any of the devices which could be powered up, and place them in a metal cabinet in the logistics office.

On Ng’s instructions, the woman would pack the devices into boxes and raise a delivery order for them.

Ng would then arrange for a courier company to collect the boxes of iPhones. She would personally endorse the delivery orders to get past the security checks at the Pegatron warehouse.

The iPhones were delivered to a Malaysian address, which Lim had provided to Ng.

She would then raise a closure request to Apple for the cases to be closed manually. This was done to prevent Pegatron or Apple from detecting the loss of the iPhones.

Lim was responsible for liaising with buyers overseas, and paying the profits to himself and Ng.

The offences came to light when three auditors from Apple’s compliance and security team conducted a surprise audit check on Pegatron on May 21, 2019. They discovered there were iPhones which were unaccounted for in its inventory.

Lim will be appealing against his conviction and sentence. His bail has been set at $120,000.