A massive procurement fraud scheme has been brought to justice in Virginia, with a Hampton-based U.S. defense contractor, its owner, and four employees facing severe consequences. Beyung S. Kim, the 62-year-old owner of Iris Kim, Inc. (aka ‘I-Tek’), was sentenced to 58 months in prison yesterday for his role in the scheme.
Kim’s four employees, Seung Kim, Dongjin Park, Chang You, and Pyongkon Pak, were also sentenced today to a combined 35 months in prison. These six individuals were found guilty of engaging in an extensive procurement fraud scheme involving more than $7 million in government contracts targeting the U.S. Department of Defense and other federal government agencies.
The scheme, which lasted from 2011 to 2018, involved the defendants obtaining government contracts with certain set-aside preferences and source-of-good requirements. However, they defrauded the U.S. government by fraudulently importing goods into the country that were made in China in violation of the terms of these contracts. The defendants then falsely relabeled these goods as if they were made in the U.S.
‘The defendants’ egregious scheme caused the U.S. government to spend over $7 million on fraudulently imported goods,’ said Acting U.S. Attorney Raj Parekh for the Eastern District of Virginia. ‘These funds were intended for deserving beneficiaries, including American workers, service-disabled veterans, and authorized trading partners.’
The defendants’ actions not only defrauded the U.S. government but also threatened the readiness and safety of our nation’s warfighters, damaged the integrity of the Department of the Navy procurement process, and squandered valuable investigative resources. ‘This scheme is a reprehensible example of the lengths to which some individuals will go to make a profit,’ said Eric Maddox, Special Agent in Charge of the NCIS Economic Crimes Field Office.
The Iris Kim, Inc. corporation defrauded the U.S. government out of millions of dollars, violating its contract by attempting to use substandard goods made in China and then relabeling them as ‘Made in the U.S.A.’ in order to make a hefty profit. ‘Thanks to the multi-agency investigative work uncovering this procurement fraud scheme, those involved will now face the consequences of their crimes,’ said Raymond Villanueva, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
The sentencings demonstrate the resolve of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners in protecting the safety and readiness of our military. ‘DCIS and its partners will vigorously pursue those who put our warfighters at risk and undermine the integrity of our procurement process,’ said Christopher Dillard, Special Agent in Charge of the DCIS Mid-Atlantic Field Office.
Key Facts
- State: Virginia
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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