Arrest warrants have been issued for six former employees of Apple Inc., for a scheme in which they are alleged to have tricked the tech company into matching thousands of dollars in donations to two children’s charities, when the employees were not in fact donating a dime.
An investigation by the Santa Clara County District Attorney’s Office concluded that over three years, the six tech employees defrauded both the State of California and Apple’s Matching Gifts Program, obtaining approximately $152,000 for a cultural exchange program, then overreporting around $100,000 in charitable contributions as tax deductions.
DA investigators alleged that 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. Investigators said the donations were returned to the men, and that Kwan – the CEO of Hop4Kids and accountant for the cultural exchange program – kept Apple’s matching funds. Meanwhile, all the donors wrote off their “charitable donations” on their tax returns, investigators said.
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 accused of multiple felony offenses including grand theft, conspiracy to commit felony grand theft, perjury, and tax fraud. They also face charges under the aggravated white-collar crime enhancement due to the substantial sums involved. If convicted, they could face time in jail, be forced to pay back restitution, and be levied fines and fees.
Arrest warrants have been issued for all defendants, District Attorney Jeff Rosen said in a statement today.
“This case underscores our unwavering commitment to rigorously prosecuting individuals who defraud the tech community and misuse vital charitable programs and state resources,” said 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,” said Rosen. “Give – legally – to help the needy, not to help yourself.”
Between July 1, 2018, and April 6, 2021, the defendants are alleged to have manipulated donations to the charities.
The scheme worked like this, according to investigators:
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.
Then 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,” prosecutors said in a statement. Kwan, a certified public accountant, also prepared fraudulent tax returns and encouraged participation by offering free or discounted tax services.
Rosen urged anyone with further information on this case or other cases involving the misuse of charitable donation matching programs to contact the District Attorney’s Office. Anyone with information should contact Investigator Justin DeOliveira, email
jd*********@da*.org
.
