Washington City man accused of $2.1 million in illegal kickbacks to buy 5 properties, 2 vehicles

Stock image | Photo by Pierre Desrosiers/iStock/Getty Images Plus, St. George News

ST. GEORGE — A Washington City man was arrested and indicted on multiple charges for using his position and authority in a Hurricane company to solicit and obtain kickbacks for his personal benefit, according to a federal indictment unsealed Friday morning.

Nan Ma, 37, of Washington City, booking photo taken in Washington County, Utah, Sept. 3, 2020 | Photo courtesy of the Washington County Sheriff’s Office, St. George News

Nan Ma, 37, a Chinese citizen with legal permanent residency in the U.S., is in jail after he was indicted in federal court on three counts of wire fraud and six counts of money laundering – charges that were filed against the defendant for awarding lucrative contracts to Chinese companies and receiving kickbacks that he used to purchase a luxurious house and expensive cars, according to the indictment filed in U.S. District Court.

As the officer of SVT, a production and audio sourcing company located in Hurricane, Ma allegedly received more than $2.1 million in kickbacks in exchange for awarding nearly $12.4 million in contracts to the Chinese companies, all of which he concealed from his employer by lying, according to the indictment.

According to the indictment, the Hurricane company produces home audio products and purchases most of its component parts from suppliers in China.

With a master’s degree in electronic marketing, Ma was hired as the company’s vice president in 2011 and was responsible for taking engineering drawings, ideas and designs to Chinese factories for the purpose of obtaining bids to manufacture component parts.

The defendant was also tasked with establishing and maintaining good relationships with the Asian suppliers to ensure the Hurricane company would continue to obtain quality products and fair pricing, a position that afforded him a degree of authority that helped him further the scheme.

Moreover, the company paid $18,000 in legal fees on behalf of the defendant in an effort to secure his immigration status so he could live and work in the United States while traveling to China on behalf of the business.

The company also raised Ma’s salary so he could qualify for a professional work visa. They later petitioned to have the defendant’s immigration status adjusted a second time, which allowed him permanent residency in the U.S. under the designation of a “professional holding an advanced degree.”

Ma purchased a home for approximately $450,000, and when asked, he told the company’s CEO the money came from his ailing father in China.

The indictment also alleges that Ma told the CEO that his father had to get the money out of China before his death; otherwise, it would be taken by the Chinese government.

“Ma’s explanation about the source of the funds was false,” federal prosecutors noted in court records.

During the arrest Thursday, Washington City Police officers assisted federal agents “since it was at the suspect’s home here in Washington City,” Washington City Police Chief Jason Williams said, adding that all of Ma’s bank accounts have been frozen and his assets are in the process of being seized.

The federal government is seeking forfeiture of five properties in St. George and one in Washington City, as well as two vehicles — all of which were purchased using funds allegedly obtained in the scheme.

The indictment alleges that an officer of the company assigned to establish and maintain relationships with suppliers, Ma had a fiduciary duty of loyalty to his employer, without being secretly rewarded for his decision through payments from the suppliers he selected, actions the company knew nothing about.

It was a violation of not only the defendant’s fiduciary duty but also of the company’s right to honest services, the indictment states, when Ma accepted the kickback payments from the company’s suppliers – particularly in light of the fact that Ma was responsible for determining which suppliers the company would contract with to manufacture its products.

Stock photo by Alex Star/iStock/Getty Images Plus, St. George News

Ma then provided his personal bank account information to the suppliers he selected, including the seven named in the indictment, so they could pay him directly funds that were later transferred between various banks and investment companies.

The defendant also arranged for any funds that were supposed to be sent to his company for repairs to any products sent by the suppliers, to instead be deposited in his accounts, which was not allowed under the terms of his employment.

The defendant remains in custody and is scheduled to appear in U.S. District Court in St. George Wednesday.

If convicted, the maximum penalty for each of the three wire fraud counts is 20 years in federal prison, while each of the six money laundering counts carries a maximum penalty of 10 years in prison.

The U.S. Attorney’s Office is prosecuting the case, while special agents of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Divisions and criminal investigators with the IRS are handling the investigation.

Copyright St. George News, SaintGeorgeUtah.com LLC, 2020, all rights reserved.

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