DOD EMPLOYEE PLEADS GUILTY TO SUBMITTING A FALSE CLAIM FOR HOUSING

FROM:  U.S. JUSTICE DEPARTMENT 
Thursday, November 14, 2013
Department of Defense Employee Pleads Guilty to Submitting False Claim for Housing Allowance

A Department of Defense (DOD) employee has pleaded guilty to filing a false claim with the DOD while stationed in the Republic of Korea (ROK) to fraudulently obtain $64,000 in housing allowance, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.

Patrick Y. Kim, 56, of Reno, Nev., pleaded guilty today before U.S. District Judge Howard D. McKibben in the District of Nevada in Reno to one count of making a false claim.  Kim faces a maximum penalty of five years in prison when he is sentenced on Feb. 12, 2014.  As part of his plea agreement, Kim has agreed to pay full restitution to the DOD in the amount of $64,000.

The former chief of the Furniture Branch at the United States Army Garrison in Daegu, ROK, Kim admitted that he submitted a fraudulent lease to the housing office to obtain a living quarters allowance (LQA) that he was not entitled to receive.  Kim began working at Daegu Garrison in or about October 2002, and, as a DOD civilian employee working in the ROK, he was entitled to receive certain housing allowances, including LQA under certain circumstances.  To receive LQA, Kim was required to submit a copy of a housing lease in support of his application and acknowledge that the LQA payments were exclusively for the payment of rent and not for the payment of refundable security deposits or “key money” leases.  Key money leases – sums of money paid to a lessor in lieu of rent, which are returned to the lessee at the end of the lease – are common in the ROK; however, they are prohibited by State Department regulations.

Kim admitted that in September 2008, he was looking for a new apartment as the lease for his current apartment was about to expire.  He and his wife located a residence at an apartment complex; however, the owners of the apartments did not offer traditional rental leases – only key money leases and purchases.  On or about Sept. 8, 2008, Kim’s wife entered into a key money lease for one of the apartments.  Kim admitted that he knew that State Department regulations prohibited him from receiving LQA to pay for the key money lease signed by his wife.  On or about Sept. 9, 2008, Kim created a fake rental lease for the subject property and submitted it to the housing office at Daegu Garrison in support of his request for LQA.  The fake lease for the apartment purported to be a two-year lease with a total cost of $64,000.  Kim admitted receiving $64,000 in LQA, which is non-taxable, and also admitted that he used the money to pay for a portion of the key money lease entered into by his wife.

Kim also admitted that he created a fake receipt for the purported $64,000 rental payment and submitted it to the housing office at Daegu Garrison to justify his receipt of the LQA.  He received the $64,000 back at the end of the key money lease in 2010, and he used it for the purchase of a new residence in the ROK.  

The case is being investigated by the U.S. Army Criminal Investigation Division and the FBI.  The case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Sue P. Fahami of the District of Nevada.