California man admits selling fake electronics to US military

A US man has pleaded guilty to a scheme to defraud the Department of Defense by selling it more than $3.5m worth of fan assemblies that were either counterfeit or misrepresented as new.

According to court documents, Steve Kim (63) of Alameda County, California, controlled a company which sold the fan assemblies to the DoD’s Defense Logistics Agency (DLA), using counterfeit labels – some of which used another company’s registered trademarks.

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.

Kim pleaded guilty to one count of wire fraud and one count of trafficking in counterfeit goods. He is scheduled to be sentenced on July 17 and faces a maximum penalty of 20 years in prison on the wire fraud count and 10 years in prison on the trafficking in counterfeit goods count.

“The defendant sold counterfeit and deficient fan assemblies for use in military systems to increase his profit,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division.

“Criminals who cheat the US military by selling deficient or counterfeit goods put our national security at risk. This case demonstrates the Justice Department’s commitment to protecting the military supply chain and Americans’ security.”