Hampton-based business owner, 4 employees plead guilty to fraud scheme targeting DOD agencies

Newport News

Credit: txking/iStock/Getty Images Plus/Getty Images

NEWPORT NEWS, Va. (WAVY) – A Hampton-based business owner and four employees all pleaded guilty Friday to a multi-million dollar fraud scheme that targeted the Department of Defense and other federal government agencies.

According to court documents, 61-year-old Beyung S. Kim of Newport News — owner of Iris Kim, Inc., (aka I-Tek) — and four employees engaged in a conspiracy and scheme related to certain government contracts from 2011 to 2018.

I-Tek allegedly acted as a “supplier of goods,” including providing items to the U.S. Marine Corps, U.S. Army, U.S. Coast Guard, and the National Guards of various states, among other agencies.

The government contracts had specific “set-aside preferences and source of good requirements.” The conspirators acted to defraud the U.S. and fraudulently imported goods into the country that were made in China — which was in violation of the terms of the contracts. 

The group then falsely relabeled the goods as if they were made in the U.S. Kim and his employees also concealed that the goods were imported from China by acting through a separate nominee company in which they installed a “nominee officer” of I-Tek in order to be able to fraudulently qualify for certain set-aside contracts.

The conspirators also submitted false documents and further falsely classified the value of the goods imported into the U.S. so as to avoid higher duties and taxes.

The five conspirators are scheduled to be sentenced mid-March. In addition to Kim, Seung Kim, 30, of Newport News, Dongjin Park, 53, of Yorktown, Chang You, 61, of Yorktown, Pyongkon Pak, 53, of Toano, and Li-Ling Tu, 57, of China will all be sentenced.

Each defendant faces a maximum term of five to seven years in prison. Actual sentences for federal crimes are typically less than the maximum penalties.

A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. 

Latest News

Copyright 2021 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Trending Stories

Don't Miss

WAVY Twitter Widget

***Don’t Miss Module Removal CSS***

WAVY Facebook