A California man has pleaded guilty to selling $3.5 million in counterfeit and deficient electronics to defraud the Department of Defense’s (DoD) Defense Logistics Agency (DLA).
Steve H.S. Kim, 63, of Alameda County, sold fan assemblies that were counterfeit, used, or surplus to the DLA while claiming they were all new.
“The defendant sold counterfeit and deficient fan assemblies for use in military systems to increase his profit,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Criminals who cheat the U.S. military by selling deficient or counterfeit goods put our national security at risk. This case demonstrates the Justice Department’s commitment to protecting the military supply chain and Americans’ security.”
According to the Department of Justice, Kim created counterfeit labels to trick the DLA into accepting the fan assemblies.
"Some of these counterfeit fans were installed or intended to be installed with electrical components on a nuclear submarine, a laser system on an aircraft, and a surface-to-air missile system," the DOJ said.
“Through his company, Kim delivered counterfeit products to our armed services and tried to pass off non-conforming products with fake invoices,” said U.S. Attorney Ismail Ramsey for the Northern District of California. “Swindling our military is a sure way to find oneself in jail. This office is always on the lookout for fraudsters and will prosecute anyone caught cheating our military by providing products that endanger our service people or compromise our readiness.”
Kim has pleaded guilty to one count of wire fraud and one count of trafficking in counterfeit goods. His sentencing is scheduled for July 17.
According to the DOJ's press release, Kim faces a maximum penalty of 20 years on the wire fraud count and 10 years in prison on the trafficking in counterfeit goods count.
“The result of this joint investigation underscores the importance of our federal law enforcement partnerships and shows that by working together we can identify, prosecute, and dismantle businesses that supply the U.S. military with fraudulent parts and services,” said Special Agent in Charge Keith K. Kelly of the Army CID Fraud Field Office. “Our Army communities and the public can rest assured that we are committed to pursuing anyone that would defraud the U.S. government for their own personal gain and put combat readiness at risk.”
