East Bay man pleads guilty to selling counterfeit electronics to U.S. military
An Alameda County man pleaded guilty Thursday to defrauding the U.S. Department of Defense by selling it electronics that were either counterfeit or misrepresented as new.
A press statement from U.S. Attorney Ramsey Ismail said Steve H.S. Kim, 63, sold fan assemblies to the Defense Department's Defense Logistics Agency (DLA) that were installed with electrical components of a nuclear submarine, a laser system on an aircraft, and a surface-to-air missile system.
Kim claimed the assemblies were new, but according to court documents, the assemblies were used and surplus. Kim also tricked the DLA into accepting the fan assemblies by creating counterfeit labels that he attached to them, and when the DLA questioned Kim about the origin of the assemblies, Kim gave the DLA fake tracing documents he had created and often signed using a false identity.
"Swindling our military is a sure way to find oneself in jail," said Ramsey in a prepared statement. "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."
"The defendant sold counterfeit and deficient fan assemblies for use in military systems to increase his profit," said Principal Deputy Assistant Attorney General Nicole Argentieri in a prepared statement. "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."
Kim pleaded guilty to one count of wire fraud and one count of trafficking in counterfeit goods and his sentencing was scheduled for July 17. He faces a maximum penalty of 20 years in prison on the wire fraud and 10 years in prison for trafficking counterfeit goods. Any sentence would take into account sentencing guidelines and other statutory factors.