Va. attorney pleads guilty to tax fraud, agrees to pay IRS $869K in back taxes
Daily Press July 29, 2022
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 she’s already agreed to.
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.
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.
Beyung Kim, 63 — now in federal prison in West Virginia — owned and operated a Hampton company, I-Tek, that provided clothing and various promotional materials to the military between 2011 and 2018.
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 various employees defrauded the government by attesting that the goods were “Made in the USA” when 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 involved in I-Tek’s conspiracy to defraud the government in the importing, court documents say. But she was involved in a separate effort to evade taxes on some of the proceeds that came in.
A statement of facts agreed to by both prosecutors and the defense as part of 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 got those payments, it wired about $2.2 million to an 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 it 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 of that amount 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’s web page at her law firm says she holds an undergraduate degree in accounting from the College of 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.
The website says she’s a founding board member of the Peninsula School for Autism, a board member of the Hampton Roads International Montessori School, and an advisor to the Peninsula Korean-American Association.
Kim’s attorney in the tax fraud case, Timothy Clancy, said his client is doing all she can to make amends.
“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.”
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.
Kim’s bond conditions require her to stay at her home on Ferguson Cove in Newport News between now and her sentencing. She can’t leave the state of Virginia except for a pre-planned vacation to the Outer Banks that her probation officer has signed off on.
She’s not allowed to open any lines of credit and has to make her financial accounts open for inspection.
Beyung Kim was sentenced in August 2021 to four years and 10 months in prison for I-Tek’s conspiracy to defraud the United States and is slated for release in late 2024. He’s also on the hook to pay $7.6 million in restitution.
Four other I-Tek employees were also sentenced in the conspiracy case last year:
Dongjin “D.J.” Park, 55, of York County, was sentenced to 31 months and ordered to pay $475,000 in restitution. Pyongkon “Phil” Pak, 54, of James City County, was sentenced to 32 months and $147,000 in restitution. Chang “Alex” You, 62, of York County, was sentenced to five months and $247,000 in restitution; and Seung “Sam” Kim, 32, of Newport News, was sentenced to five months and $36,000 in restitution.
Nosuk Kim will be sentenced Jan. 25 on the tax evasion charges.
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