Six former Apple employees charged in charity fraud scheme
The Santa Clara (California) County District Attorney’s Office has charged six former employees of Apple Inc., for a scheme in which they tricked the tech company into matching thousands of dollars in donations to children’s charities, when they were not in fact donating a thing.
Over three years, the six tech employees defrauded both the State of California and Apple’s Matching Gifts Program. Under the direction of Siu Kei (Alex) Kwan, five defendants all pretended to make donations to the American Chinese International Cultural Exchange (ACICE) or Hop4Kids. In fact, they were given the donations back and Kwan – the CEO of Hop4Kids and accountant for ACICE – kept Apple’s matching funds. Meanwhile, all the donators wrote off their “charitable donations” on their tax returns.
Siu Kei (Alex) Kwan, 37, of Castro Valley, Yathei (Hayson) Yuen, 34, of San Jose, Yat C (Sunny) Ng, 35, of Milpitas, Wentao (Victor) Li, 38, of Hayward, Lichao Ni, 39, of Sunnyvale, and Zheng Chang, 31, of Union City, are charged with multiple felony offenses including grand theft, conspiracy to commit felony grand theft, perjury, and tax fraud. What’s more, they face charges under the aggravated white-collar crime enhancement due to the substantial sums involved.
Between July 1, 2018, and April 6, 2021, the defendants are alleged to have manipulated donations to the charities. If convicted, they could face time in jail, be forced to pay back restitution, and be levied fines and fees.
By exploiting Apple’s employee gift-matching program, the defendants extracted approximately $152,000 from Apple’s program and overreported around $100,000 in charitable contributions as tax deductions.
“This case underscores our unwavering commitment to rigorously prosecuting individuals who defraud the tech community and misuse vital charitable programs and state resources,” says District Attorney Jeff Rosen. “We commend Apple for coming forward and actively collaborating with our Office to uncover this elaborate fraud. We encourage others in the tech community to do the same. It’s the holidays. Give – legally – to help the needy, not to help yourself.”
The scheme worked like this: Employees made donations through a third-party platform called Benevity. Once a donation was made by the employee, Apple matched it either 100% or 200% and Benevity would disperse the funds to the charity. Kwan would leverage his position with the charities and reimburse the employees while keeping the matching funds for himself against Apple Charity Matching policy. This deceitful manipulation defrauded both Apple and the State of California, as the employees would then falsely claim these donations as tax deductions. Kwan, a certified public accountant (CPA), also prepared fraudulent tax returns, and encouraged participation by offering free or discounted tax services.
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