SAN JOSE — A former San Jose resident faces a lengthy prison term and hefty fines after pleading guilty to money laundering and witness tampering in connection with a scheme to sell computer parts stolen from Cisco Systems Inc., federal authorities said.
On Monday, 59-year-old Kenneth Tam pleaded guilty to one count each of money laundering and witness tampering. He could be sentenced to a maximum of 20 years in prison and ordered to pay up to $750,000 in fines.
Prosecutors contend that Tam stole the computer parts between 2006 and 2010, when he worked at Cisco. Tam sold the parts to a co-conspirator, Cuong Cao Dang, for cash, which was deposited into bank accounts owned by a foreign national but controlled by Tam.
According to Tam’s plea agreement, Dang gave Tam a $500,000 check for the parts in February 2010. Tam told Dang to write “loan” on the memo line in order to disguise the true nature of the payment. Then, after Tam learned Dang’s company was being investigated, Tam gave Dang a backdated check for $500,000 to make it appear as though a loan had been repaid.
Tam also told Dang he would lie to Cisco and any investigators about his knowledge and involvement with Dang, according to the plea agreement. He also provided the owner of the bank accounts with a false cover story to use if contacted by investigators.
In October 2017, a grand jury handed down a superseding indictment charging Tam with two counts of witness tampering, as well as one count each of conspiracy to commit mail fraud, money laundering, structuring financial transactions, making a false statement to government agents and contempt.
All but one count each of money laundering and witness tampering will be dropped as long as Tam complies with the terms of the plea agreement, according to prosecutors.
U.S. District Court Judge Edward J. Davila scheduled Tam’s sentencing hearing for May 6.
Dang, for his part, pleaded guilty to his role in the scheme and was sentenced in October 2017 to 90 months in prison to be followed by three years of supervised release.
