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Counterfeit electronics allegedly supplied for US submarine, laser and missile systems

A heavy equipment operator assigned to the 60th Aerial Port Squadron moves oxygen tanks in a warehouse at Travis Air Force Base, California, 27 April 2021. Photo: Air Force Airman 1st Class Alexander Merchak (Stock photo/Unrelated to Case)

A US man has pled guilty to supplying more than US$3.5 million in counterfeit electronics which were intended to be used in a nuclear submarine, aircraft laser system, and surface-to-air missile system.

A US man has pled guilty to supplying more than US$3.5 million in counterfeit electronics which were intended to be used in a nuclear submarine, aircraft laser system, and surface-to-air missile system.

The United States Attorney’s Office, Northern District of California, alleged that Alameda County’s Steve H.S. Kim sought to defraud the US Department of Defense’s Defense Logistics Agency (DLA) by selling fan assemblies to the DLA that were either counterfeit or misrepresented to be new.

According to court documents, Kim, 63, and Company A allegedly sold counterfeit fan assemblies to the DLA, including used and surplus fan assemblies that he claimed were new. In addition, it’s alleged that he created counterfeit labels and provided fake tracing documents, often signed using a false identity.

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“Some of these counterfeit fans were installed or intended to be installed with electrical components of a nuclear submarine, a laser system on an aircraft, and a surface-to-air missile system,” a US Attorney’s Office statement said on 28 March.

Kim has since pled guilty to one count of wire fraud and one count of trafficking in counterfeit goods. Kim’s hearing for sentencing is scheduled for 17 July.

“Through his company, Kim delivered counterfeit products to our armed services and tried to pass off non-conforming products with fake invoices,” said US attorney Ismail Ramsey for the Northern District of California.

“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.”

Kim 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.”

US officials said the supply of counterfeit products to the US Department of Defence, such as in this case, endangers the DOD mission, has the potential to harm effective combat operations, impacts mission readiness, and betrays the public’s trust.

“The result of this joint investigation underscores the importance of our federal law enforcement partnerships and shows that by working together, we can identify, prosecute, and dismantle businesses that supply the US military with fraudulent parts and services,” said Special Agent in Charge Keith K. Kelly of the Department of the Army Criminal Investigation Division’s (Army CID) Fraud Field Office.

“Our army communities and the public can rest assured that we are committed to pursuing anyone that would defraud the US government for their own personal gain and put combat readiness at risk.”

Assistant US attorney Katherine Lloyd-Lovett for the Northern District of California, Criminal Division Fraud Section assistant chief Kyle C. Hankey, and trial attorneys Louis Manzo and David D. Hamstra of the Criminal Division’s Fraud Section are prosecuting the case.

Assistant chief Adrienne Rose and senior counsels Jason Gull and Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section provided substantial assistance with the investigation.

Robert Dougherty

Robert Dougherty

Robert is a senior journalist who has previously worked for Seven West Media in Western Australia, as well as Fairfax Media and Australian Community Media in New South Wales. He has produced national headlines, photography and videography of emergency services, business, community, defence and government news across Australia. Robert graduated with a Bachelor of Arts, Majoring in Public Relations and Journalism at Curtin University, attended student exchange program with Fudan University and holds Tier 1 General Advice certification for Kaplan Professional. Reach out via email at This email address is being protected from spambots. You need JavaScript enabled to view it. or via LinkedIn.
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