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California man admits to selling counterfeit goods to the DOJ

On Behalf of | Apr 26, 2024 | White Collar Crimes

The U.S. Department of Justice has announced that a California man has admitted to selling the U.S. Department of Defense $3.5 million worth of fan assemblies that were either used or counterfeit. The man pleaded guilty to one count of selling counterfeit goods and one count of wire fraud on March 27. When he is sentenced on July 17, the 63-year-old Alameda County resident could be sent to a federal prison for up to 30 years.

Defective fans

According to court papers, the man operated an unnamed company that sold fan assemblies that he claimed were brand new to the DOJ’s Defense Logistics Agency. When the fans were inspected, they were found to be either counterfeit or used surplus equipment that had been repackaged. The DOJ planned to install the fan assemblies in nuclear submarines, surface-to-air missile batteries and aircraft laser sighting systems. Before the man’s alleged fraud was discovered, some of the counterfeit or used fans were installed in military equipment.

Fake invoices and tracing documents

To conceal his alleged activities, federal prosecutors say the man created fake invoices and tracing documents. He also allegedly placed counterfeit labels on surplus fans that featured another company’s registered trademarks. The man is also said to have tried to conceal his scheme by signing tracing documents using a false identity.

A maximum sentence is unlikely

This case was resolved when the man entered into a plea agreement with federal prosecutors, which means he is unlikely to receive the maximum sentences allowed by law. Prosecutors in white-collar crime cases usually have compelling electronic and documentary evidence, but they are often willing to make significant sentencing concessions in return for guilty pleas. This saves taxpayers money and avoids the risks of arguing complex facts before a jury.