Two Charged In Bribery Scheme Involving Orange County Company That Sold Components To Panasonic For Use In Personal Computers
SANTA ANA, California – Federal prosecutors today filed criminal charges against the chief executive of an Irvine company who for years paid kickbacks to ensure contracts for his firm, as well as an official with Panasonic’s American subsidiary who accepted the bribes from the Californian supplier of electronic components.
The two men who were charged today with “honest services” wire fraud are:
William McMahon, 47, of Norco, California, the CEO and co-owner of Trustin Technology, and
Sean Volin, 38, of Oakland, New Jersey, a manager with the Panasonic Corporation of North America in Secaucus, New Jersey.
In addition to criminal informations filed in United States District Court, prosecutors filed plea agreements in which both men admit their criminal conduct and agree to cooperated with investigators in their ongoing probe.
According to the court documents, for the past decade Trustin sold random access memory modules and then hard drives to Panasonic for use in at least one line of laptop computers. Panasonic was Trustin’s largest and most important customer.
Approximately 10 years ago, Volin approached the then-CEO of Trustin to discuss a price reduction for hard drives Trustin was supplying to Panasonic. In response, the then-CEO proposed a kickback scheme in which Panasonic would continue to pay the same price for hard drives, but Trustin would give Volin half of the proposed price reduction for each unit sold. Volin “agreed with [the CEO’s] proposal, did not obtain a price reduction for Panasonic, and a stream of illicit payments between Trustin and [Volin] began,” according to Volin’s plea agreement.
McMahon became CEO of Trustin in 2005, and he learned of the kickback arrangement that had already brought more than $100,000 to Volin. The payments stopped under McMahon’s watch for a period of time, but the payments resumed as McMahon developed a relationship with Volin. Instead of paying a kickback for each hard drive sold to Panasonic, McMahon made regular payments in exchange for Volin “looking out for Trustin’s interests and [as] a reward for defendant’s prior assistance to Trustin,” according to Volin’s plea agreement.
From November 2005 through the end of 2011, McMahon oversaw payments of more than $555,000 that went to a company Volin had established to accept the illicit payments from Trustin. In total, Volin was paid more than $664,900 by Trustin. Volin and McMahon also admit in the court documents that the Panasonic employee received other benefits, including trips to the Kentucky Derby and Napa Valley.
“In exchange for this stream payments, and acting with the intent to defraud Panasonic of [Volin’s] duty of honest services, [Volin] continued to assist Trustin in obtaining additional business from Panasonic, including Panasonic’s designating Trustin a ‘Master Vendor,’” according to court documents, which say that as a result of the scheme “Trustin was able to obtain tens of millions of dollars of business from Panasonic.”
The wire fraud charge alleged in the two cases filed today carries a statutory maximum penalty of 20 years in federal prison.
McMahon and Volin will be summoned to appear in federal court in Orange County in February.
The cases are the result of an ongoing investigation being conducted by U.S. Immigrations and Customs Enforcement’s Homeland Security Investigations and the Federal Bureau of Investigation.
Panasonic Corporation of North America fully cooperated with the government’s investigation.
Release No. 13-014