Man Pleads Guilty to Selling Defense Department $3.5 Million Worth of Bogus Fans

Man Pleads Guilty to Selling Defense Department $3.5 Million Worth of Bogus Fans

U.S. Army soldiers with a Patriot surface-to-air missile battery during a NATO exercise at a Lithuania airbase on July 20, 2017. (Mindaugas Kulbis/AP)

Rudy Blalock

Rudy Blalock

4/2/2024

Updated: 4/2/2024

A man in San Francisco’s East Bay sold the U.S. Defense Department $3.5 million worth of fan assemblies to cool down equipment that were counterfeit or misrepresented as new, according to a U.S. Attorney’s Office press release.
Steve H.S. Kim, 63, of Alameda County pleaded guilty March 28 to defrauding the department’s Defense Logistics Agency (DLA).
According to court documents, Kim claimed the fan assemblies were new, but in fact they were used and surplus. He tricked the DLA by creating counterfeit labels that he attached to the fans and provided fake tracing documents when questioned about the origin of the assemblies, according to the press release.
The fans were to be installed with electrical components of a nuclear submarine, a laser system on an aircraft, and a surface-to-air missile system.
“Swindling our military is a sure way to find oneself in jail. 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,” U.S. Attorney Ismail Ramsey for the Northern District of California said.
Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, said Mr. Kim sold the counterfeit and “deficient” fan assemblies to increase his profits but posed threats to national security at the same time.
“Criminals who cheat the U.S. 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,” she said.
Mr. Kim pleaded guilty to one count of wire fraud and one count of trafficking in counterfeit goods. A hearing was scheduled for his sentencing on July 17 by U.S. District Judge Haywood S. Gilliam. Mr. Kim faces up to 20 years in prison on the fraud count and 10 years on the trafficking count, according to the press release.
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Rudy Blalock

Rudy Blalock

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Rudy Blalock is a Southern California-based daily news reporter for The Epoch Times. Originally from Michigan, he moved to California in 2017, and the sunshine and ocean have kept him here since. In his free time, he may be found underwater scuba diving, on top of a mountain hiking or snowboarding—or at home meditating, which helps fuel his active lifestyle.

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