Virginia Defense Contractor Owner Gets 58 Months for Relabeling China-Made Goods as USA-Made

The owner of a Hampton, Virginia defense contractor was sentenced to 58 months in prison for a scheme that sold China-made goods to the military relabeled as made in the USA. Four employees received a combined 93 months.

Federal prosecutors in the Eastern District of Virginia said the scheme involved more than $7 million in government contracts.

Key details

• From 2011 to 2018, Iris Kim, Inc. (I-Tek), its owner Beyung S. Kim and employees imported goods made in China and relabeled them as USA-made.
• The goods went to the Marine Corps, Army, Coast Guard and state National Guards, among other agencies.
• The contracts had set-aside preferences and source-of-goods requirements.
• The group also used a nominee company to hide the imports and installed a nominee officer to qualify for contracts for service-disabled veterans.
• They undervalued imports to avoid higher duties.

“This prosecution demonstrates our firm commitment to holding accountable those who defraud our military and brazenly disregard laws that are designed to protect the strength of our country’s infrastructure and manufacturing base.”

Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia

FAQ

What was the sentence?

The owner got 58 months in prison. Four employees got a combined 93 months.

What did the company do?

It imported China-made goods, relabeled them as USA-made and sold them under federal contracts.

Who investigated?

HSI, the DoD Inspector General’s DCIS and NCIS, with help from the Defense Contract Audit Agency.