Californian Swindles Pentagon Out of $3.5M in Counterfeit Electronics

by Carolyn Mathas

Here’s a news story that underlines the importance of purchasing from trusted sources.

A California man sold more than $3.5 million worth of counterfeit or used electronics to the Defense Department. Steve Kim, 63, controlled “Company A,” which sold fan assemblies to the Defense Logistics Agency that were either counterfeit, used, or surplus parts, claiming they were new.

Kim created documentation to pass the parts off as real, making counterfeit labels, some using a third company’s registered trademarks. He then attached the labels to the fan assemblies he sold to the DLA. When the DLA questioned Kim about the origin of the fan assemblies, Kim used fake tracing documents that he created and signed using a false identity, according to prosecutors.

The Defense Department installed or intended to install the counterfeit fans on a nuclear submarine, an aircraft laser system, and a surface-to-air missile system.

“Swindling our military is a sure way to find oneself in jail,” said U.S. Attorney for the Northern District of California Ismail Ramsey. “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.”

Kim pleaded guilty to one count of wire fraud and one count of trafficking in counterfeit goods and faces 30 years in prison. His sentencing is scheduled for July 17.

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