Tuesday, August 9, 2022

"Made in the USA"

An attorney has consented to license revocation by the Virginia State Bar Disciplinary Board in the wake of a tax conviction.

The Daily Press reported on the conviction

A Newport News attorney has agreed to pay the IRS $869,000 in back taxes after admitting to federal tax fraud.

Nosuk Pak Kim, 61, pleaded guilty Thursday to two counts of felony tax evasion in U.S. District Court in Richmond. She faces up to five years in prison and up to $250,000 in fines for each of the two counts, aside from the restitution to which she’s already agreed.

Kim, who’s been licensed as a Virginia lawyer for 31 years, is a founding partner at the Oyster Point law firm Cowardin & Kim, where she specialized in immigration law.

She’s been a substitute judge since 2014 in Newport News General District Court and Juvenile and Domestic Relations District Court, and has taught in recent years as an adjunct professor at the College of William & Mary Law School.

Her husband, Beyung Kim, 63 — now in federal prison in West Virginia — owned and operated a Hampton company, I-Tek, which provided clothing and various promotional materials to the military from 2011-18.

The company, on Executive Drive in Hampton’s Coliseum area, provided thousands of “West Point swim trunks” to the Army and various trinkets — coffee mugs, water bottles, mouse pads, foam balls, T-shirts and pencils — for the Marine Corps and various state National Guards. The company also provided wire rope for the Coast Guard operations.

But court documents say Beyung Kim and certain employees defrauded the government by attesting that the goods were “Made in the USA” when in fact they were manufactured in China or other low-cost sourcing locations.

“Beyung Kim and I-Tek sourced these products in cheaper, foreign markets like China to inflate their profit margins,” court documents say. “They concealed the fraud by, among other things, removing the labels reflecting the true country of origin.”

The scheme also involved providing the Department of Defense with fake supplier quotes and purchase orders. The conspiracy separately featured a retired disabled veteran falsely posing as the company’s “president and owner” in order to qualify for Small Business Administration set-asides.

Nosuk Kim wasn’t charged in the underlying fraud case involving her husband and I-Tek. But court documents say she worked to evade taxes on some of the proceeds that came in.

A statement of facts agreed to by prosecutors and the defense as part of Nosuk Kim’s guilty plea Thursday says I-Tek was paid more than $4 million under a Marine Corps contract — plus another $141,000 for 30,000 T-shirts to the Indiana National Guard — in 2015 and 2016.

But when I-Tek received those payments, it wired about $2.2 million to an overseas entity in China, Goldway International Trading LLC, which then wired the money back to Nosuk Kim’s attorney trust account at her Newport News law firm.

The lawyer then withdrew that money, spending most of the cash to pay down debt on the couple’s financial interests.

Kim took out four separate cashier’s checks — totaling about $1.2 million — to pay down a business loan for a company called BBK Enterprises LLC based at a Jefferson Avenue address.

She used $621,000 to pay down the balance on a home equity line of credit on the couple’s home on Ferguson Cove in Newport News.

She used the rest — about $415,000 — to buy out a partner and pay down a business loan involving a commercial property on J. Clyde Morris Boulevard.

The IRS said the Kims should have reported that $2.2 million as taxable income in 2015 and 2016. The failure to do so, the statement of facts said, cost the government about $869,000 in lost tax revenue.

Nosuk Kim’s web page at her law firm says she holds an undergraduate degree in accounting from William & Mary in 1983 and a law degree from Suffolk University School of Law in Boston in 1989.

“For over 25 years she has represented clients of all nationalities who wish to work and stay in America,” the website says.

In 2011, Kim co-founded the Peninsula School for Autism, the first school on the Peninsula specifically devoted to autistic children. She was a board member of the Hampton Roads International Montessori School and an advisor to the Peninsula Korean-American Association, among other groups.

Kim’s attorney, Timothy Clancy, said his client is doing all she can to make amends for what she did.

“I certainly think it’s fair to say that she is very well regarded in the community, both professionally and personally,” Clancy said. “She’s certainly accepting responsibility and is doing everything she can to remedy this situation, including paying the taxes.”

As of Thursday, the Virginia State Bar lists Kim as “an attorney in good standing” in Virginia, with no disciplinary actions to her name in 31 years of practicing law. Felony convictions are typically a bar to practicing law in the Commonwealth.

Clancy said Kim is no longer practicing law.

“She’s doing no more than wrapping up her practice and ensuring that her clients are protected,” he said.

She was accused of working to evade taxes on some of the millions of dollars the government paid to her husband’s company over the years.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2022/08/the-herald-press-reported-on-the-conviction-a-newport-news-attorney-has-agreed-to-pay-the-irs-869000-in-back-taxes-after-a.html

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