Irvine Inflight Entertainment Business Faces $1 Billion Federal Fraud Case

Those tiny seat screens are astonishingly lucrative for somebody

An Irvine company that supplies extremely lucrative inflight entertainment systems to airlines around the globe is fighting a federal lawsuit in Southern California that accuses it of engaging in racketeering, unjust enrichment and fraud exceeding $1 billion.

According to officials at Wamar International LLC, they were hired in 2012 by Thales Avionics, Inc. to do what it couldn’t do after years of trying: unseat Panasonic as the dominant supplier of in-flight entertainment packages in the prized Middle Eastern air market.

“Over the span of seven years, Wamar senior management secured over $2 billion in contracts [for Thales] with large airline and transport companies in the Middle Eastern region,” the 100-page lawsuit states. “Instead of paying outstanding, agree-upon consulting fees, the defendants have conspired to induce Wamar’s continued performance with no intention of ever paying what is owed.”

Lawyers for Thales have responded by seeking a quick dismissal of the court action inside Orange County’s Ronald Reagan Federal Courthouse.

But representatives of Wamar, which is based in Simi Valley and owned by an American citizen of Jordanian descent, say the company handed Thales “astonishing results,” boosting the Irvine business’ percentage of the in-flight entertainment market in the Middle East from zero to 60 percent.

The lawsuit also alleges that Thales Avionics, which is a wholly-owned subsidiary of Thales S.A., is trying outrun government investigations.

“For at least seven years, Thales violated its own internal compliance rules and possibly even U.S. and French compliance regulations and laws,” Wamar’s lawsuit declared. “It did so for money. Lots of money. But suddenly, at the end of 2017, Thales got spooked by its mounting compliance violations and began trying to re-write the facts to avoid the severe consequences for its actions. First, it forced its longtime senior compliance officer out of Thales, paying him an enormous ‘golden parachute’ to have him quietly leave the company. Then, Thales engaged in a desperate conspiracy to cover up its malfeasance.”

Thales S.A. is 25 percent owned by the government of France and has annual income of more than $19 billion in 56 countries, according to the lawsuit.

The Middle East market includes Turkish Airlines, Kuwait Airways, Emirates Airlines and Qatar Airways.

In April, Panasonic agreed to pay a $280.6 million to end an investigation into allegations the company gave bribes to win inflight entertainment contracts in the Middle East.

U.S. District Court Judge David O. Carter has scheduled a Feb. 4 hearing to consider a dismissal motion by Thales.

CNN-featured investigative reporter R. Scott Moxley has won Journalist of the Year honors at the Los Angeles Press Club; been named Distinguished Journalist of the Year by the LA Society of Professional Journalists; obtained one of the last exclusive prison interviews with Charles Manson disciple Susan Atkins; won inclusion in Jeffrey Toobin’s The Best American Crime Reporting for his coverage of a white supremacist’s senseless murder of a beloved Vietnamese refugee; launched multi-year probes that resulted in the FBI arrests and convictions of the top three ranking members of the Orange County Sheriff’s Department; and gained praise from New York Times Magazine writers for his “herculean job” exposing entrenched Southern California law enforcement corruption.

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