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Woman jailed for misappropriating more than 25,000 iPhones from repair company, earning S$3 million

Woman jailed for misappropriating more than 25,000 iPhones from repair company, earning S$3 million

Boxes of iPhones purchased by customers are pictured next to an iPhone XS on display at the Apple Store in Singapore September 21, 2018. REUTERS/Edgar Su/Files

SINGAPORE: A logistics manager at a phone repair company misappropriated more than 25,000 defective iPhones over one-and-a-half years, conspiring with a Malaysian man to sell them overseas and earning more than S$3 million in profits.

For her crimes, 40-year-old Serene Ng Shu Kian was jailed for nine years on Monday (Jan 11). She pleaded guilty to one charge each of conspiring to commit criminal breach of trust as a servant and using part of the criminal proceeds to buy a condominium apartment.

A third charge was considered in sentencing.

The court heard that Ng worked at Pegatron, which provides iPhone repair services for Apple in Asia, from October 2014.

She was in charge of the logistics department, which received and assigned defective iPhones to repair teams and delivered them to various destinations. Her co-accused, Pegatron assistant operations manager Lim Jen Hee, updated Apple's inventory and was responsible for submitting closure requests to Apple.

Sometime in late 2017, Ng and Lim agreed on a scheme to pocket defective iPhones by exploiting security gaps in the process that were not detailed in court documents.

Their method meant that neither Pegatron nor Apple would realise there were missing phones in the latter's inventory, and both of them agreed to sell the misappropriated iPhones overseas to third parties and split the profits.

To carry out the crimes, Ng instructed a subordinate who was unaware of the scheme to set aside iPhones in a metal cabinet in the logistics office and pack them into boxes of up to 60 phones.

Ng then arranged for the boxes to be collected by a courier company, bypassing security checks by endorsing the delivery orders personally and marking them in a certain way. The phone were delivered to a Malaysian address and Ng would enter paperwork that rendered the cases closed in the system and avoided detection.

After receiving the misappropriated phones, Lim liaised with buyers overseas to sell them and split the profits with Ng. A small number of misappropriated phones could not be sold as they contained fake components, and they would be secretly returned to Pegatron's inventory.

Between Jan 31, 2018 and May 2019, the pair misappropriated 25,051 defective iPhones from Pegatron. The firm suffered S$6,799,790 in losses, with Ng making a profit of S$3,115,482. She used S$71,750 of the proceeds to place a deposit for the purchase of a condominum unit in Tampines, an offence under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act.

She also used the profits for her personal expenses, to repay debts and to set up a provision shop business named 24 Hrs.

The offences came to light when three auditors from Apple's compliance and security team conducted a surprise audit on Pegatron in May 2019 and discovered that there were iPhones that were unaccounted for.

Pegatron lodged a police report on May 24, 2019, and Ng and Lim were arrested. Police seized thousands of dollars from Ng's bank accounts and froze a sum of about S$33,000 in the corporate account belonging to 24 Hrs, as well as the S$71,750 deposit held by the property developer.

In June 2019, Pegatron commenced civil proceedings in the High Court against Ng to seek damages for the loss caused, as they had to compensate Apple for the misappropriated iPhones. They obtained a judgment in default against her in August 2019, with the quantum of damages to be assessed subsequently.


The prosecution asked for nine years' jail, saying that Ng and Lim had conspired to perpetrate a sophisticated and complex scheme to misappropriate "a staggering 25,051 defective iPhones" from their unsuspecting employer.

The loss suffered by Pegatron extends to the possible loss of reputation and business goodwill with Apple, said Deputy Public Prosecutor Tan Zhi Hao.

Ng had abused her position as an "insider" and logistics manager, a relatively senior role, and put in a significant degree of planning to organise the courier service and phone deliveries on a twice-weekly basis.

She had also used fraudulent documents such as delivery orders to pass security checks and evade detection, misappropriating the phones over more than a hundred occasions.

Lawyer Sunil Sudheesan, who took on the case at the eleventh hour, said Ng suffers from persistent depressive disorder. He said Ng paid more than S$3 million to loan sharks as she owed them money, and thought this was "the only way out to square her debts". She has a young daughter who will miss her mother, said the lawyer.

Ng cried in court and said she was guilty and cares only about her daughter, adding that she will face the music and thinks she should be responsible for her mistakes and serve the sentence so her daughter can grow up and be blessed. 

For criminal breach of trust as a servant, she could have been jailed up to 15 years and fined.

Lim's case is pending.

Source: CNA/ll


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