A California man, Neil Felahy, pleaded guilty to conspiracy and counterfeit-goods trafficking. He faces up to Mr. Felahy sold counterfeit computer chips to the Naval Sea Systems Command. The counterfeit chips were purchased from China.
Purchasing counterfeit computer chips from China may have some serious consequences.
From IT World
In a plea agreement reached on Friday, Neil Felahy of Newport Coast, California, pleaded guilty to conspiracy and counterfeit-goods trafficking for his role in an alleged chip-counterfeiting scam that ran between 2007 and 2009. Felahy, his wife Marwah Felahy, and her brother Mustafa Abdul Aljaff operated several microchip brokerage companies that imported chips from Shenzhen, in China's Guangdong province.
They would buy counterfeit chips from China or else take legitimate chips, sand off the brand markings and melt the plastic casings with acid to make them appear to be of higher quality or a different brand, the U.S. Department of Justice said in a press release.[...]
The counterfeit chips were allegedly sold to Naval Sea Systems Command, the Washington, D.C., group responsible for maintaining the U.S. Navy's ships and systems, as well as an unnamed vacuum-cleaner manufacturer in the Midwest. The U.S. Department of Defense did not respond to requests for comment about the incident.[...]
The next year, the U.S. Federal Bureau of Investigation (FBI) broke up a distribution network for counterfeit Cisco Systems routers, seizing $3.5 million worth of components. According to a leaked FBI presentation on its Cisco Raider operation, fake Cisco routers, switches and cards were sold to the U.S. Navy, Marine Corps, Air Force, Federal Aviation Administration, and even the FBI itself.
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