A business owner and four employees have all pleaded guilty to engaging in what prosecutors described as “an extensive procurement fraud scheme involving millions of dollars in government contracts targeting the Department of Defense and other federal government agencies.”
From 2011 to 2018, Iris Kim, Inc., (aka I-Tek) owner Beyung S. Kim, 61, of Newport News, and employees 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, “engaged in a conspiracy and scheme related to certain government contracts for which I-Tek acted as a supplier of goods, including items for the U.S. Marine Corps, U.S. Army, U.S. Coast Guard, and the National Guards of various states, among other agencies,” according to court documents.
The business was based in Hampton.
Those contracts had certain set-aside preferences and source of good requirements.
“The conspirators acted to defraud the U.S. and commit other substantive offenses by fraudulently importing goods into the U.S. that were made in China, in violation of the terms of these contracts,” according to a news release from the U.S. Attorney’s Office for the Eastern District of Virginia. “They then falsely relabeled these goods as if they were made in the U.S. Kim and his employees also acted through a separate nominee company to conceal the importing of goods from China and installed a nominee officer of I-Tek in order to be able to fraudulently qualify for certain set-aside contracts.”
The group 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.
They are scheduled to be sentenced mid-March. Each defendant faces a maximum term of five to seven years in prison, prosecutors said.
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