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.
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