San Francisco Sun

A California man has been sentenced to three years and six months in prison for defrauding the Department of Defense’s (DoD) Defense Logistics Agency (DLA) by selling over $3.5 million worth of counterfeit and substandard fan assemblies.

“Our military must be able to trust that the equipment it is receiving actually reflects what it has purchased,” said U.S. Attorney Ismail Ramsey for the Northern District of California. “Kim fraudulently substituted counterfeit and non-conforming products for the equipment he promised to provide to the government. This sentence should serve as a warning to all vendors that such fraud will not be tolerated.”

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 used or surplus fan assemblies that Kim claimed were new. To deceive the DLA into accepting these fan assemblies, Kim created counterfeit labels—some bearing Company B’s registered trademarks—that he attached to the products. When questioned about their origin, Kim provided fake tracing documents often signed using a false identity. Some of these counterfeit fans were installed or intended for installation with electrical components on a nuclear submarine, a laser system on an aircraft, and a surface-to-air missile system.

The announcement was made by U.S. Attorney Ismail J. Ramsey; Principal Deputy Assistant Attorney General Nicole M. Argentieri; 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.

DCIS, NCIS, HSI, and Army CID investigated the case.

Assistant U.S. Attorney Katherine Lloyd-Lovett prosecuted the case along with DOJ Criminal Division’s Fraud Section Assistant Chief Kyle C. Hankey, Trial Attorney David D. Hamstra, and former Trial Attorney Louis Manzo. Assistant Deputy Chief Adrienne Rose and Senior Counsels Jason Gull and Matthew A. Lamberti from the Criminal Division’s Computer Crime and Intellectual Property Section provided substantial assistance with the investigation.