Bay Area/ Oakland/ Crime & Emergencies
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Published on March 30, 2024
East Bay Con Man Pleads Guilty, Sells $3.5M in Fake Military TechSource: Google Street View

An East Bay man, Steve H.S. Kim, has admitted to hoodwinking the Pentagon out of more than $3.5 million by selling counterfeit electronics, some of which ended up in high-tech military weaponry. The guilty plea, involving fan assemblies that were either fake or not up to scratch, was entered in front of U.S. District Judge Haywood S. Gilliam, Jr.

"Swindling our military is a sure way to find oneself in jail," said U.S. Attorney Ismail Ramsey, for the Northern District of California. Kim's company tricked the Defense Logistics Agency (DLA) by supplying bogus fan assemblies, intended for sophisticated military systems, falsifying newness with counterfeit labels, and attempting to cover his tracks with fabricated invoices and fake tracing documents, according to court documents.

Officials have underscored the grave implications of such deceit on national security. "Criminals who cheat the U.S. military by selling deficient or counterfeit goods put our national security at risk," pointed out Nicole M. Argentieri, Principal Deputy Assistant Attorney General, and head of the Justice Department's Criminal Division. The components were thought to be set for integration into critical defense systems, including a nuclear submarine, an aircraft's laser system, and, a surface-to-air missile system.

This elaborate scam prompted a robust joint investigation from multiple agencies. "This investigation demonstrates DCIS’ ongoing commitment to working with its law enforcement partners to hold individuals who defraud the DoD accountable," said Special Agent in Charge Bryan D. Denny of the Defense Criminal Investigative Service (DCIS) Western Field Office. Such partnerships are essential to uncovering and halting the trade of counterfeit products that, could at worst, endanger combat operations.

Kim faces a maximum of 20 years in prison for wire fraud and an additional 10 years for trafficking in counterfeit goods, with the sentencing hearing set for July 17, as per Judge Gilliam's recent order. The final sentence will be determined after considering several factors, including the guidelines set by the U.S. Sentencing Commission.

The collaborative effort to bring Kim to justice involved several agencies, including DCIS, the Naval Criminal Investigative Service (NCIS), Homeland Security Investigations (HSI), and the Department of the Army Criminal Investigation Division (Army CID). The case is being prosecuted by Assistant U.S. Attorney Katherine Lloyd-Lovett, Criminal Division Fraud Section Assistant Chief Kyle C. Hankey and Trial Attorneys Louis Manzo, and David D. Hamstra, with additional support from the Computer Crime and Intellectual Property Section.