East Bay man gets prison for selling fake, subpar electronics to Defense Dept.

OAKLAND, Calif. - An East Bay man was sentenced to three and a half years in federal prison after scheming to defraud the Department of Defense of millions of dollars by selling counterfeit or substandard electronics, federal officials said.

Steve H.S. Kim of Alameda County sold more than $3.5 million in fan assemblies to the department's Defense Logistics Agency that were either counterfeit or misrepresented as new when they were used or surplus, according to officials.

"Our military must be able to trust that the equipment it is receiving actually reflects what it has purchased," U.S. Attorney for the Northern District of California Ismail Ramsey said. "Kim fraudulently substituted counterfeit and non-conforming products for the equipment he promised to provide to the government." 

Court documents said the 63-year-old controlled "Company A" which sold the fan assemblies to the DLA. Then, Kim would create counterfeit labels, using registered trademarks from "Company B" and attach them to the Company A parts.

Kim hid his actions by giving the DLA fake tracing documents he himself created and typically signed under a fake identity.

Officials said some of the counterfeit fans were installed or planned to be installed with electrical parts on a nuclear submarine, a laser system on an aircraft, and a surface-to-air missile system.