Beyung S. Kim, Procurement Fraud, Virginia 2020

Fraudulent Scheme Unfolds in Hampton, Virginia

NEWPORT NEWS, Va. – In a stunning revelation, a Hampton-based defense contractor, Iris Kim, Inc., and its owner, Beyung S. Kim, 61, of Newport News, along with six employees, have been charged with engaging in an extensive procurement fraud scheme. The alleged conspiracy targeted various government agencies, including the Department of Defense, with millions of dollars in false contracts.

According to the unsealed indictment, Beyung S. Kim, Seung Kim, Dongjin Park, Chang You, Pyongkon Pak, Li-Ling Tu, and employees of Iris Kim, Inc., engaged in a conspiracy and scheme to defraud the United States from at least 2011 through at least 2018. The indictment alleges that the defendants acted to defraud the United States by fraudulently importing goods into the United States that were made in China, in violation of the terms of these contracts.

The indictment further alleges that the defendants falsely relabeled these goods as if they were made in the United States. To conceal the importing of goods from China, the defendants acted through a separate nominee company and installed a nominee officer of Iris Kim, Inc. in order to qualify for certain set-aside contracts.

As a result of this scheme, the United States paid Iris Kim, Inc. approximately $8.1 million from around January 2012 through about December 2018. The total amount paid for the entirety of the contracts Iris Kim, Inc. supplied during this same time period was approximately $24 million, with over $20 million in revenue resulting from contracts where Iris Kim, Inc. obtained goods from China.

The U.S. Attorney's Office for the Eastern District of Virginia, along with several other agencies, announced the charges. Assistant U.S. Attorney Brian J. Samuels and Special Assistant U.S. Attorney Matthew Mattis are prosecuting the case.

An indictment is merely an accusation. The defendants are presumed innocent until proven guilty.

Mandatory Facts:

Defendant: Beyung S. Kim, Iris Kim, Inc.

Criminal Charges: Conspiracy and procurement fraud scheme.

City and State: Newport News, Virginia.

Date: At least 2011 through at least 2018.

Sentence or Outcome: Currently pending.

Dollar Amounts: Approximately $8.1 million paid, approximately $24 million in total contracts.

Source: https://www.justice.gov/usao-edva/pr/hampton-defense-contractor-and-employees-indicted-fraud-charges