NEWPORT NEWS, Va. (WRIC) — A Newport News lawyer who sat on the state bar’s disciplinary committee dodged over $800,000 in taxes and defrauded the U.S. military by passing off Chinese-manufactured supplies as American-made.
Nosuk Kim, 61, is a prominent lawyer, landlord and defense contractor who will now serve 4 years and 4 months in prison after she plead guilty to tax evasion and admitted to defrauding the U.S. military when she did business with them.
“By virtue of her profession, the defendant was uniquely positioned to know that she was violating the law,” prosecutors wrote. “And she did it anyway.”
According to a statement of facts, agreed to by Kim as part of her plea agreement, Nosuk and her husband, Beyung Kim, owned the I-Tek company, a defense contractor that was awarded millions of dollars in government contracts between 2011 and 2018.
As part of the conditions of those contracts, I-Tek was required to do two things: first, it had to set aside a certain portion of its business for companies run by service-disabled veterans, and second, under the “Buy American Act” it had to ensure that the goods it was providing were made in the United States.
The Kims falsely claimed that I-Tek was a “service-disabled veteran-owned small business.”
According to the prosecution’s sentencing memorandum, a paralegal at Kim’s law firm — who was actually a disabled veteran — was listed as the company’s president, even though she owned no stake in the company and never served as president.
“This had the practical effect of allowing I-Tek to take contracts away from small businesses owned by service-disabled veterans,” the prosecution wrote.
They also repeatedly purchased cheap goods from overseas and passed them off as American-made. In one contract with the Indiana National Guard, they provided 30,000 recruitment t-shirts from China, then imported them through a shell corporation and removed tags showing their country of origin in order to pass them off as American-made.
They also defrauded the U.S. Marine Corps in a similar way on a $6.7 million contract for “promotional materials.”
To avoid taxes on their fraudulent gains, they wired $970,000 to a shell corporation based in China, then re-routed that money back to the states, depositing it in the account of Nosuk Kim’s law firm, Cowardin & Kim.
From there, she used the money to pay off her Newport News Home, buy out the other investors in a commercial real estate company and then pay off that company’s debt.
On their tax return that year, the Kims reported making $334,287 — completely omitting the $970,000 they received from their fraudulent contracts.
The next year, they routed another $1.25 million through the same series of shell corporations and trusts, using the cash to pay off business loans on their commercial real estate and again omitting the money entirely from their tax returns.
“The defendant’s tax fraud caused more than $869,000 in loss to the United States in just a two-year period,” prosecutors wrote in a sentencing memorandum. “There was no financial exigency or reason to do any of this. On the contrary, during this same period, the defendant and her husband lived a life of luxury in their waterfront home on the James River and made substantial sums of money from the defendant’s law practice, their joint real-estate holdings, and her husband’s business.”
In their conclusion, prosecutors called on Kim to be sentenced to just under four years in prison, writing that her crimes were committed “in disregard of one of her most basic obligations as a citizen of the United States.”
But in her own sentencing letter, Kim requested leniency, asking for a sentence “well below the guideline range,” which recommended a sentence between 46 and 57 months.
Kim wrote that she was the primary caretaker — in addition to a hired full-time aide — for her 28-year-old autistic son, and wrote that, “It is likely that [he] will regress as a result of Kim’s incarceration.”
The court was evidently unconvinced by either side’s argument, imposing a sentence of 52 months, 6 months more than that requested by the prosecution.