Is Apple's Charity Clause Being Misused by Employees for Salary Fraud in India?

Frauds can often be very ingenious. And this one over at Apple sounds particularly clever and insidious. Apple has reportedly fired 185 employees at its headquarters in Cupertino after finding that these employees indulged in a monetary fraud to boost their compensation. Of the fired employees, six have been named by authorities in the Bay Area and warrants have been issued against them. While none of these six is Indian, another report highlights that among the fired employees many are Indians who were reportedly misusing some Telugu charity organisations in the US to carry out fraud. 

"Is Apple's Use of Charity Clause Justified in Firing Employees for Salary Fraud?"

NBC, citing the district attorney's office in Los Angeles, notes that Apple has terminated several employees from its Bay Area offices over the misuse of its Matching Grants program. Apple has not issued an official statement on the matter and we were also unable to independently verify the information.

The reported scheme revolves around Apple's Matching Grants program, a corporate social responsibility initiative designed to amplify employees' charitable contributions by matching their donations to nonprofit organisations. The allegations suggest that some employees, in collaboration with specific nonprofit organisations — including associations reportedly linked to the Indian community — falsified donations to exploit the program.

According to these claims, employees donated funds to nonprofits, which were then matched by Apple. However, the nonprofits allegedly funnelled the original donations back to the employees, allowing them to retain Apple's matching contributions. If accurate, this would not only breach corporate policies but also violate US tax laws, as the employees' false claims could amount to tax fraud.

According to the Santa Clara County district attorney's office, six individuals defrauded Apple of approximately $152,000 over three years by falsely claiming to donate to two nonprofits — the American Chinese International Cultural Exchange (ACICE) and Hop4Kids.

The individuals charged include:

-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

-Zheng Chang, 31, of Union City

According to the DA's Office, Kwan, identified as the ringleader, served as both the CEO of Hop4Kids and the accountant for ACICE. The scheme reportedly involved employees pretending to make donations, which were later returned to them. Kwan retained Apple's matching contributions and also wrote off these fictitious donations on the defendants' tax returns, defrauding the state of California in the process.

A separate report by Great Andhra notes that a total of 185 Apple employees have been fired, even though current authorities have released details of only 6 whom they have charged with certain crimes. This report notes that there are many Indians amongst the fired employees. These Indians, claims the report, misused Apple's Matching Grants program, a corporate social responsibility initiative designed to amplify employees' charitable contributions by matching their donations to nonprofit organisations. The allegations suggest that some employees, in collaboration with specific non-profit organisations –– including associations reportedly linked to the Telugu employees –– falsified donations to exploit the program.