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Financial Crimes
09/04/2020

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ICE investigation results in wire fraud charges for Utah man

DOJ states he solicited and obtained kickbacks from Chinese companies

SALT LAKE CITY — U.S. Immigration and Customs Enforcement investigates a Utah man who was charged Sept. 3 with using his position and authority as the officer in charge of production and sourcing at a home audio products company to solicit and obtain kickbacks for his personal benefit from Chinese companies.

Nan Ma, 37, of Hurricane, Utah, is a Chinese citizen with legal permanent resident status in the United States. He faces a maximum penalty, for each of the three wire fraud counts of, 20 years in federal prison. The six money laundering counts each have a potential maximum penalty of 10 years in prison.

U.S. Attorney John W. Huber, District of Utah, announced the indictment. The case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) and IRS-Criminal Investigations.

In exchange for the kickbacks, the indictment alleges Ma awarded lucrative contracts to these companies to manufacture and sell products to his employer. Ma used a portion of the kickback money to purchase a luxurious house and expensive cars. Ma concealed the source of the funds he was getting through the alleged kickbacks by making false representations to his employer, according to the indictment.

Ma received approximately $2.1 million in kickbacks in exchange for awarding approximately $12.4 million in contracts to the Chinese companies, all of which he concealed from his employer, identified in the indictment by the initials SVT.

After Ma purchased a home for approximately $450,000, SVT’s CEO, who knew Ma’s salary, asked Ma how he was going to pay for the home. Ma responded that the money came from his ailing father in China, who was trying to get money out of China to avoid having the Chinese government take it upon his death. Ma’s explanation about the source of the funds was false.

SVT produces home audio products and purchases most of its component parts from suppliers in China. SVT hired Ma, who has a master’s degree in electronic marketing, in May 2011 as vice president of production/sourcing. His responsibilities included taking SVT’s engineering drawings, ideas, and designs to Chinese factories and obtaining bids from the factories to manufacture SVT’s component parts. His responsibilities also included establishing and maintain good relationships with Chinese suppliers to ensure SVT obtained quality products and favorable prices.

SVT took steps, including paying $18,000 in legal fees, to help secure Ma’s immigration status so he could live and work in the United States as well as travel to China on behalf of the business. The company later raised Ma’s salary so he could qualify for a professional work visa, and later petitioned to have Ma’s immigration status adjusted again so he could be a permanent resident immigrant with the designation of “professional holding an advanced degree.”

In his capacity as an officer at SVT assigned to establish and maintain relationships with suppliers, Ma owed a fiduciary duty of loyalty to SVT. The business was entitled to have Ma evaluate and select suppliers without being secretly rewarded for his decision through payments from the suppliers he selected. It was a violation of Ma’s duty, and of SVT’s right to honest services, for Ma to accept kickback payments from SVT’s suppliers, particularly when Ma was responsible for determining which suppliers SVT would contract with to manufacture its products.

The indictment alleges Ma provided personal bank account information to the suppliers he selected, including the seven suppliers identified in the indictment as suppliers A through G, so they could pay him after they received payments for products from SVT. After receiving funds from the suppliers, Ma transferred the money among various accounts, banks, and investment companies, according to the indictment.

Ma also told suppliers that funds for repairs to products SVT had purchased should be routed to an account he or his wife held contrary to SVT policies for employees.

Ma is charged with three counts of wire fraud and six counts of money laundering and seeks the forfeiture of five properties in St. George and one in Washington along with two vehicles.

He had an initial appearance Sept. 4 in federal court in St. George. He is detained pending a detention hearing Wednesday in St. George, Utah. Individuals charged in an indictment are presumed innocent unless or until proven guilty in court.

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Last Reviewed/Updated: 09/11/2020