Company, Executives Facing Charges for Selling Falsely Labeled Surveillance Equipment from China to US
The Justice Department is pursuing criminal charges against Aventura Technologies of Commack, New York for selling Chinese-origin goods falsely labeled U.S.-origin to the U.S. government and others, the U.S. Attorney’s Office Eastern District of New York said in a news release. Seven current and former employees are also charged, it said. "Aventura imported networked security products from PRC manufacturers with known cybersecurity vulnerabilities, and resold them to U.S. military and other government installations while claiming that they were American-made," said the DOJ.
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During the investigations, "the government intercepted and covertly marked numerous shipments from PRC sources to Aventura’s Commack headquarters," the DOJ said. "In some cases, cameras shipped from the PRC were pre-marked with Aventura’s logo and the phrase 'Made in USA,' accompanied by an American flag. In many instances, the items were later resold to government agencies to whom the defendants falsely represented that the products were American-made."
Meanwhile, company executives "took extraordinary steps to conceal this scheme," said the DOJ. Multiple emails and messages between company employees, including Aventura’s Managing Director Jack Cabasso, discuss the need to hide the true origin of the products involved, according to the compliant.
“As alleged, the defendants falsely claimed for years that their surveillance and security equipment was manufactured on Long Island, padding their pockets with money from lucrative contracts without regard for the risk to our country’s national security posed by secretly peddling made-in-China electronics with known cyber vulnerabilities,” stated United States Attorney Donoghue. “With today’s arrests, the defendants’ brazen deceptions and fraud schemes have been exposed, and they will face serious consequences for slapping phony ‘Made in the U.S.A.’ labels on products that our armed forces and other sensitive government facilities depended upon.”
The DOJ said that the company "made upwards of $88 million, including over $20 million in federal government contracts" over the last decade, "while claiming that it was manufacturing its products at its headquarters in Commack. Cabasso's wife Frances was also charged in scheme and their home was searched, said the DOJ. "The government has also seized the Cabassos’ 70-foot luxury yacht, and has frozen approximately $3 million in 12 financial accounts that contain proceeds from the defendants’ unlawful conduct."