Apple iPhone 5s (Image: File photo)

Taiwanese prosecutors on Friday indicted a former senior-level Foxconn manager for allegedly stealing and selling 5,700 iPhone handsets in China to pocket around $1.56 million, according to AsiaOne.

Read this Hon Hai, Foxconn boxed in after Apple boom Hon Hai and Foxconn need to diversify from Apple in a hurry. That move is easier said than done. Read More

Thousands of iPhone handsets were smuggled out of the factory, prosecutors said, at the direction of a Taiwanese manager name "Tsai" working in Foxconn's handset testing area.

The iPhone handsets stolen by "Tsai" and accomplices weren't meant for retail and were to be marked as scrapped once testing was completed.

Foxconn, the world's largest assembler of electronics, works with Apple, Sony, and others to put millions of handsets on store shelves. An internal audit at Foxconn caught the theft.

Eight employees allegedly helped steal the iPhone 5 and iPhone 5S handsets. New Taipei district prosecutor's office said the handsets were sold between 2013 to 2014, and ring leader "Tsai" could face maximum of a 10-year jail sentence.

Foxconn employs over 1 million people and has been hit with its fair share of employee relation issues.

In 2015, prosecutors charged five former Foxconn employees for receiving kick backs from suppliers for clearing quality checks. It's also suffered an uptick in employee suicides, bringing Foxconn's practices into government, media, and partner companies -- like Apple's -- attention.