The ringleader, identified only by his family name Tsai, was reported as having instructed eight other employees to smuggle out thousands of iPhone 5 and iPhone 5s devices in order to sell them illegally. The operation was caught during an internal audit of the Shenzhen-based Foxconn factory, and Tsai was arrested this year for running the operation, and then released on bail.
Tsai has now been charged with breach of trust and faces a maximum of ten years as a jail sentence if found guilty. It wasn't made clear when the final verdict on the matter will be reached.
Tsai and his accomplices sold the testing phones, which were supposed to be scrapped, to stores in Shenzhen and made nearly Tw$50 million (S$2.2 million) from 2013 to 2014, said the New Taipei district prosecutor's office. Foxconn reported the case to Taiwanese authorities following an internal audit and Tsai was questioned after he returned to the island earlier this year and was released on bail.In August, it was reported that Foxconn's profits had declined 31 percent in the second quarter of 2016, affected by the iPhone sales slump Apple faced at the same time this year. For the entire quarter, Foxconn made 17.7 billion New Taiwan dollars, down from NT$25.7 billion a year prior.