South Korean businessman convicted of fraud after Chicago trial

A South Korean businessman was convicted Wednesday of multiple fraud charges for placing fake “Assembled in USA” stickers on his products, after a federal jury trial in Chicago.

Heon Seok Lee, CEO and president of KTURBO and KTURBO USA, was found guilty of five counts of wire fraud and three counts of fraudulent importation of goods into the United States, according to a statement from the U.S. Attorney’s office.

Lee, 50, secured contracts to supply numerous municipalities across the country with wastewater-treatment aeration blowers that he falsely stated had been manufactured in the U.S., allowing his company to win contracts funded through the stimulus package provided to municipalities under the American Recovery and Reinvestment Act of 2009, according to federal prosecutors. Congress passed ARRA to combat the recession of 2008.

KTURBO fully assembled its aeration blowers in South Korea and shipped them in final form to the U.S., with the intention of getting more than $1.3 million from the fraudulently obtained contracts, according to prosecutors. KTURBO placed phony placards on its equipment, stating that it was “Assembled in the USA” before shipping.

Law enforcement searched KTURBO’s facility in west suburban Batavia in 2011 and seized blowers that had been fully manufactured in South Korea, according to prosecutors. Lee, a Seoul resident, was extradited to the United States in 2015.

He was found guilty of eight counts of fraud after an eight-day jury trial in federal court in Chicago. Each count carries up to 20 years in prison. No sentencing date has been scheduled.