A California man was sentenced yesterday to three years and six months in prison for a scheme to defraud the Department of Defense’s (DoD) Defense Logistics Agency (DLA) by selling over $3.5 million worth of fan assemblies to the DLA that were either counterfeit or that he misrepresented were new when in fact they were used or surplus.
According to court documents, Steve H.S. Kim, 63, of Alameda County, controlled Company A, which sold fan assemblies to the DLA that were either counterfeit or were used or surplus fan assemblies that Kim claimed were new. To trick the DLA into accepting the fan assemblies, Kim created counterfeit labels—some of which used Company B’s registered trademarks—that he attached to the fan assemblies he sold to the DLA. When the DLA questioned Kim about the origin of the fan assemblies, Kim concealed his scheme by giving the DLA fake tracing documents that he created and often signed using a false identity. 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.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Ismail J. Ramsey for the Northern District of California; Special Agent in Charge Bryan D. Denny of the DoD Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office; Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office; Special Agent in Charge Tatum King of Homeland Security Investigations (HSI); and Special Agent in Charge Keith K. Kelly of the Department of the Army Criminal Investigation Division’s (Army CID) Fraud Field Office made the announcement.
DCIS, NCIS, HSI, and Army CID investigated the case.
Assistant Chief Kyle C. Hankey, Trial Attorney David D. Hamstra, and former Trial Attorney Louis Manzo of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Katherine Lloyd-Lovett for the Northern District of California prosecuted the case. Assistant Deputy Chief Adrienne Rose and Senior Counsels Jason Gull and Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section provided substantial assistance with the investigation.