Man admits to selling fake chips to US military

© Tiko / Fotolia.
A Californian electronics trader confessed in court to selling thousands of counterfeit integrated circuits (ICs) to the US military. Some of the fakes were apparently used in weapon systems and aircraft. Now, the seller faces up to 60 years in prison.

As was recently reported, a US electronics vendor has pled guilty to charges of selling counterfeit ICs to suppliers and subcontractors in the US defense sector. According to the prosecution, some of the counterfeit chips were used in military applications – supposedly including a classified U.S. Air Force weapons system, for example. The seller also said he believed that some of the counterfeits he had supplied had been used in the B-1 Lancer Bomber military aircraft. Products of the U.S. Army, the U.S. Navy, and the U.S. Marine Corps are also said to be affected.

Previously, US investigators had seized more than 160,000 suspected counterfeit chips and almost 100,000 US dollars in cash from the trader, who was based in Orange County, California. The man had apparently imported the counterfeits from China. According to the indictment, the ICs were outdated and used – at the vendor’s instructions, they had been repainted and fixed with counterfeit trademarks as well as altered lot and origin codes. To conceal his scam, the man apparently also provided customers with fake test reports from a Chinese laboratory.

Now, the defendant admitted he knowingly sold the counterfeits to defense subcontractors. “Some of the counterfeit parts in this case were installed in military applications, which means the trafficking of these circuits posed a threat to national security,” said U.S. Attorney Nick Hanna. The trader could now face up to 60 years in prison as well as fines of more than nine million US dollars.

The current case is not the first one in which US authorities cracked down on illegal trading of potentially dangerous IT counterfeits in the military supply chain. In 2016, for example, investigators busted a gang of fraudsters dealing in fake microprocessors for military applications in an undercover operation against counterfeiters (we reported). Currently, agencies like the Defense Criminal Investigative Service (DCIS), U.S. Immigration and Costums (ICE), and Homeland Security (HSI) are taking action against counterfeiters in the defense sector: “We will relentlessly pursue those who would perpetrate this criminal activity,” said Michael Mentavlos, Special Agent-in-Charge, DCIS.

Sources: United States District Court for the Central District of California, U.S. Immigration and Customs Enforcement, Department of Defense Office of Inspector General

– Advertisement –