Prosecutors charge five over fake KF-16 parts billed as US-made for 12.8 billion won
In short
South Korean prosecutors have indicted five people from private parts and maintenance firms on charges of passing off counterfeit 'down-converter' parts for KF-16 fighter jets as genuine US-made parts, collecting about 12.8 billion won in maintenance fees from the Defense Acquisition Program Administration. Three were indicted under detention. Prosecutors said the head of the parts company bought a personal yacht and a private aircraft with the proceeds.
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The Nonsan branch of the Daejeon District Public Prosecution Office said on October 8 that it had indicted three people under detention on charges under the Act on Special Measures for Crimes Involving Military Supplies: the head of a fighter-parts maker and distributor, aged 70, a technician at an outsourced maintenance firm, aged 67, and the head of that maintenance firm, aged 62. A process guarantor and a technician at the maintenance firm were indicted without detention; Kyunghyang Shinmun gave their ages as 76 and 48. [ 1 , 2 , 3 ]
They are charged with passing off counterfeit 'down-converters' as genuine US-made parts in repair work and collecting about 12.8 billion won in maintenance fees from the Defense Acquisition Program Administration, from 2014 to February last year. The down-converter is part of the identification friend or foe equipment on the KF-16 fighter; Kyunghyang Shinmun describes it as a frequency-converting component of the system's transceiver. Replacements must be genuine parts certified to the original US maker's specifications or substitutes approved in advance by the air force. [ 1 , 2 , 3 ]
Prosecutors said the parts company head made fakes with the same appearance and product numbers as the genuine part and set up a US partner company, in which he held about 90%, to distribute them. Fakes that cost about 1.2 million won each to make were imported at about 100 million won each. Yonhap and Seoul Shinmun describe parts made in South Korea being exported to the US and re-imported. Kyunghyang Shinmun reports that this method was used from August 2014 to March 2017, bringing in about 2.9 billion won, and that from July 2017 to February last year fakes made in the US were imported, bringing in about 9.9 billion won. [ 1 , 2 , 3 ]
According to prosecutors, the technician deceived air force quality inspectors overseeing the work, and the maintenance firm head and two staff took part knowing the parts were fake so the firm would keep receiving payments. Kyunghyang Shinmun reported that the technician received about 166 million won from the parts company head as technical consulting fees. [ 1 , 2 , 3 ]
The maintenance firm head and two staff are also charged with taking 15 modules and parts from six transceivers judged unrepairable and using them in other units, receiving about 850 million won, and with obtaining a refund of about 50 million won in late-delivery penalties using falsified delivery dates. Kyunghyang Shinmun said the 850 million won is included in the 12.8 billion won total. [ 1 , 2 ]
Prosecutors said the parts company head bought a personal yacht and a private aircraft with the proceeds and that they will ask investigators to pursue recovery. Kyunghyang Shinmun reported that the case began in September 2023, when the Ministry of National Defense received a tip and referred it to the air force's investigation unit. [ 1 , 2 , 3 ]
Why it matters
Prosecutors described the case as a serious matter that fundamentally undermined national defence and the reliability and safety of the air force's combat capability. They plan to ask investigators to pursue recovery of criminal proceeds and, according to Kyunghyang Shinmun, to notify the Defense Acquisition Program Administration of problems found so it can prevent a recurrence.
Key facts
- The Nonsan branch of the Daejeon District Public Prosecution Office indicted the head of a fighter-parts maker and distributor (70), an outsourced maintenance technician (67) and the head of an outsourced maintenance firm (62) under detention, announcing it on October 8. [ 1 , 2 , 3 ]
- Two more people, a process guarantor and a technician at the maintenance firm, were indicted without detention. [ 1 , 2 , 3 ]
- The charges are under the Act on Special Measures for Crimes Involving Military Supplies. [ 1 , 2 , 3 ]
- The accused are charged with receiving about 12.8 billion won in maintenance fees from the Defense Acquisition Program Administration by passing off counterfeit down-converters as genuine US-made parts, from 2014 to February last year. [ 1 , 2 , 3 ]
- The counterfeit parts cost about 1.2 million won each to make but were imported at about 100 million won each through a US partner company in which the parts company head held about 90%. [ 1 , 2 , 3 ]
- Three of the accused are also charged with taking about 850 million won by moving 15 modules and parts out of six transceivers judged unrepairable for use in other units. [ 1 , 2 ]
- Prosecutors said the parts company head bought a personal yacht and a private aircraft with the proceeds. [ 1 , 2 , 3 ]
Confirmed by several sources
- Three people were indicted under detention and two without detention over counterfeit KF-16 down-converters. [ 1 , 2 , 3 ]
- The accused are charged with obtaining about 12.8 billion won in maintenance fees from the Defense Acquisition Program Administration. [ 1 , 2 , 3 ]
- The down-converter is fitted to the KF-16 fighter's identification friend or foe equipment. [ 1 , 2 , 3 ]
- The fakes cost about 1.2 million won each to make and were imported for about 100 million won each. [ 1 , 2 , 3 ]
- The parts company head set up a US partner company in which he held about a 90% stake to distribute the fakes. [ 1 , 2 , 3 ]
- A maintenance technician deceived air force quality inspectors overseeing the maintenance work. [ 1 , 2 , 3 ]
- Prosecutors said proceeds were used to buy a personal yacht and a private aircraft and that they will request an investigation to recover criminal proceeds. [ 1 , 2 , 3 ]
- About 50 million won in late-delivery penalties was refunded using falsified delivery-date documents. [ 1 , 2 ]
Still unclear
- Where the counterfeit parts were made over the whole period. Yonhap and Seoul Shinmun describe parts made in South Korea, exported to the US and re-imported from 2014 to February last year; Kyunghyang Shinmun reports that method only from August 2014 to March 2017, with parts made in the US imported from July 2017 to February last year.
- Whether the 850 million won from reusing parts is part of the 12.8 billion won total. Only Kyunghyang Shinmun says it is included in the total; Yonhap reports it as a separate charge without saying.
- The technician's payments from the parts company head. Only Kyunghyang Shinmun reports that the technician received about 166 million won from the parts company head as technical consulting fees.
- The defendants' earlier involvement in defence corruption probes. Only Kyunghyang Shinmun reports that the parts company head and the technician were questioned as witnesses in a similar case investigated in 2015; its text is cut off.
- How the defendants respond to the charges. None of the documents reports a response from the accused.