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Man Pleads Guilty To Selling Fake Chips To US Navy
itwbennett writes "Neil Felahy of Newport Coast, California, has pleaded guilty to conspiracy and counterfeit-goods trafficking for his role in a chip-counterfeiting scam. Felahy, along with his wife and her brother, operated several microchip brokerage companies under a variety of names, including MVP Micro, Red Hat Distributors, Force-One Electronics and Pentagon Components. '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 US Department of Justice said in a press release. The chips were then sold to Naval Sea Systems Command, the Washington, DC group responsible for maintaining the US Navy's ships and systems, as well as to an unnamed vacuum-cleaner manufacturer in the Midwest."
That sucks ;)
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
I'm imagining someone selling the Navy fake ships.
Some of my favourite people are from th US; Vonnegut, Chomsky, Bill Hicks.
You know the penalty.
"If any question why we died, Tell them because our fathers lied."
You thought you could get away with fraud while dealing with the government?
Might as well as try robbing a police station.
This is why the government shouldn't be allowed any more money than is needed to keep the lights on in the capitol, they always fuck things up! When will people learn to temper their bigoted distrust of the free market and private enterprise?
whats wrong with sony, samsung, or intel. I'm sure they could produce chips for government related applications, not some shady business no ones heard of before.
O.o
Wonder what else our armed forces and government have purchased that is fake or just plain doesn't work the way it should...
If "Kntel's" chips are just as good as Intel's, why should the military care? If they don't, hold them responsible for the difference, financial loses if we had to order more and if anyone died because of malfunctions.
The chips were then sold to Naval Sea Systems Command, the Washington, D.C., group responsible for maintaining the US Navy's ships and systems, as well as an unnamed vacuum-cleaner manufacturer in the Midwest.
Has our Navy gone from suck to blow?
Scamming someone who can answer the question, "you and what army". Oh okay, so their answer is "not army, marines" but still. Takes guts.
And with the US being involved in two wars, I think the sentence for this might actually be a cigarette, against a nice sunny wall. Blindfold optional.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Chips? Chips!?
Common, this is Slashdot. Chips? The technical jargon in the summary is horribly confusing.
For clarity, could we please use a more generic term, such as 'computer thingamajiggy?'
Way back there are accusations of ots parts from a retail radio shack that ended up in MX missile guidance systems. And it wasn't some mom and pop shop. It was one of the big boys.
Maybe someone with knowledge would know how to fake a chip upgrade that would pass inspection. I suspect that not much auditing is going on in the input side and contractors big and small are exploiting the incompetence of the govt watchdogs. If they're even there at all.
It makes you wonder how much of this sub milspec stuff is out there in critical areas.
In other words the right to regulate chip counterfeiting belongs to your local State government, until you expand the Constitution with an amendment
Wrong. This is actually a proper use of the Interstate Commerce Clause. Now arresting some poor bastard for growing pot for his own personal use on the other hand.......
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
HOW does a man and his family sell ANYTHING to the Navy? Is the Navy getting their parts from eBay or Craig's List?
The military spends billions of dollars and has the money to buy directly from known, reputable firms like AMD, Siemens, Mitsubishi, NEC, Toshiba, etc. Doing so would ensure the quality of the electronic components.
Why is the military dealing with relatively unknown distributors of suspicious origin? This story is fishy.
The military probably did not intend to use anything "purchased" from unknown distributors. This "purchase", from the onset, was intended to be a honey pot attracting unscrupulous businesses connected to hostile governments like Beijing. The purchased components were never intended to be used. The aim was to find such unscrupulous businesses, to determine the network that Beijing has established in the USA, and to shutdown American traitors who participate in such a network.
The funny thing is that the chip manufacturers commit this same fraud daily. The same silicon is packaged in one package and labeled mil grade, and another labeled commercial grade. The price is often more than a magnitude different. Sometimes it is even the same package, just different print.
Of course sometimes there is different silicone, sometimes it is different temperature bin.
Funny that this is perfectly legal for the mfg. and when some clever reseller does the same it is fraud.
BTW. Companies with military contracts are often required to give the military "best price". With a seperate label for military version of HW, this is really profitable.
don't cut it off www.mgmbill.org
Government procurement is a bureaucratic mess, and a royal pain in the ass for both buyers and sellers. Because of this (and because of rules preferring "small" and "minority-owned" businesses), it is very common for government entities to buy though a middle man that knows how their procurement systems work, rather than getting product directly from a manufacturer, especially for low-cost COTS products.
Fuck the Navy, you mean my vacuum cleaner might have sub-standard chips in it?! THIS IS AN OUTRAGE!
You can advertise in this sig from as little as £99.99 a month!
Yeah, or the minor distributors put in a lower bid. One or the other.
ASCII stupid question, get a stupid ANSI
Something makes me think that MVP Electronics, Inc. and Red Hat, Inc. would like to have a chat with him about trademark infringement.
apparently the fake chips are made with less than 50% potato, have a weird taste and are sold in a can.
Do they like Vinegar and Sea Salt or plain? Seriously, the Navy could be buying computer parts with backdoors if this is what goes on.
Is this like "counterfeit" copies of MS Windows? Where these chips that acted and functioned the same (shadow shift production runs)? Seems like we need a better word as counterfeit implies that it looks the same but does not act the same. Maybe we should just be saying "copies produced without authorization?"
The chips were then sold to Naval Sea Systems Command, the Washington, D.C., group responsible for maintaining the US Navy's ships and systems, as well as an unnamed vacuum-cleaner manufacturer in the Midwest.
Naval Sea Command is an unnamed vacuum cleaner manufacturer? You learn something new every day here on SlashDot.
Isn't it a bit hard to sell something without a name, though? How could you ask the salesperson for it? "I want one of those vacuums that don't have a name." "The Midwest one or the African one?" "I want blue, no yellow!"
Who would win this election: Andrew Weiner vs Andrew Weiner's weiner.
I knew those couldn't have been real Doritos
For that matter, how can we even be certain they're even being used for critical applications? Maybe they had some piddling alt system or prototype to develop and they just wanted to save some money? I mean, if the other (known) purchaser of these electronics is a vacuum cleaner manufacturer, We couldn't exactly be talking high-performance electronics to start with...
...Unless the reason the vacuum cleaner manufacturer is unnamed is they were working on some sort of super powerful "Stealth" Vacuum cleaner. Or maybe an Unmanned Vacuum Cleaner (a "UVC" as it were.)
Demented But Determined.
www.labrainc.com/
www.rhdistributors.com
I am Slashdot. Are you Slashdot as well?
because the only chips in my vacuum cleaner are doritos that fell on the floor.
A counterfeit jeans ring operating out of my car hole!
... devices found themselves in things like reactor control systems, missile systems, and other catastrophically lethal stuff?
Maybe the military should be making it's OWN components, instead of buying them from the people they have their guns pointed at.
Political Correctness
*ahem* The proper terminology is "Remotely Piloted Vaccuum" (RPV) ;-)
--Rags
Life is like a burrito. Sometimes the beans go bad.
Not what they expected when the navy asked for "sub-standard" chips
Because everyone knows all smaller distributors are untrustworthy. Come on.
Huge Corporate-think is really seeded deeply now, isn't it.
That nicely sums up most our middle eastern "conflicts" in 3 words.
Table-ized A.I.
OK, now I have a better understanding of why my vacuum cleaner does such a lousy job . . . and why F-22's keep landing on it.
"The bigger the lie, the more they believe." - Det. Bunk
The Military buys in far too small quantities for companies like AMD, etc. to care. While the military was once the bastion of forward looking electronics, it now focuses most of its energy on maintaining ailing fleets of old vehicles using technology that's 15+ years old (I know, I work for a company providing such support).
The main reason for purchasing through companies such as that listed above is that there are obsolete devices that are required to maintain $100000+ systems, that can ocassionally be found in the "after-market" - i.e. someone had a stash in their warehouse that they didn't use. If it wasn't for unfortunate practices such as this, the miliary budget would need to be significantly larger to redesign and build new electronics systems for its vehicles every 5 years (or every 2 years when dealing with memory technology).
Don't feed the name trolls.
I have learned that 100% of SD cards and USB drives on eBay, if from China or Hong-Kong, are counterfeits, and you're lucky if they actually have the specified capacity. You're shit-out of luck if you hope to find a good quality SLC Flash-RAM component (be it SD, CF or USB drive) - they're all MLC.
Another example: did you know that 90% of Indian Sandalwood on the market is either not Sandalwood (it's adulterated) or, if you're lucky, it's not Indian (rather Australian or New Caledonian, much lesser in quality and Santalol content)? Other essential oils' adulteration is rampant as well. There's at least twice as much Lavendel EO on the market, than there's world production.
Olive oil adulteration is very common in Spain, Italy and Greece. Coconut oil adulteration is rampant as well. And this is stuff people _eat_! And then there are several Chinese milk scandals, where dozens of babies were killed.
A strong consumer association should emerge and help sorting out the good stuff from the bad. I don't know the solution to the problem, frankly, but I know it's bad and getting worse.
"The agriculture ministry is not in charge of Gundam" - Japanese ministry official.
just send a small group of highly trained men to pay them a visit.
to parphrase Hanover Fiste:
"They should be torn into little bitsy pieces and buried alive!"
The Kruger Dunning explains most post on
The military doesn't call people up and buy things. They announce a need and people bid. UIf a company doesn't bid then there isn't much they can do about it.
Some larger companies won't deal with smaller contracts.
This story isn't fishy, nore is the use of small companies unusual.
It would be cool if it's a honeyu pot, but the odds of that is really low, and it would need to involve other agencies.
The Kruger Dunning explains most post on
"The government would have probably went on for a few more years . . ." should be rewritten as, "The government probably would have gone on for a few more years . . ."
Thanks,
GP
I have been using Bing to find their background, but I have not had any luck. Google provided even less information.
What about that guy that sold them the fake "Mission Accomplished" banner for their aircraft carrier?
Kind of funny this came up today- I work for semiconductor company and just sat through a talk yesterday about counterfeiting problem. I guess with the military stuff the problem is usually because they have to go to the lowest bidder. Authorized channels can't beat the fake stuff on price so the military gets fake stuff.
You've got to have pretty big cojones to cheat someone who can point missiles at your house.
I immediately thought of the quote about Microsoft; "the only time Microsoft will make something that doesn't suck is when they make a vacuum."
Did anybody else catch the reference to NCIS? Life imitates art.
Best regards.
Yeah, that's what we need, secret police. What could go wrong?
All My Sons?
You have amazing powers of deduction.
Chips Ahoy!
Authority questions you. Return the favor.
Because Congress has written purchasing rules for the Federal Government that give preference to small and minority owned businesses. The same rules also give preference to buying the parts as cheaply as possible.
The result is, when you are buying small quantities and/or unusual parts, you end up dealing with middlemen and minor distributors. The big guys are rarely interested in anything other than big and/or multi year purchase commitments.
Having been on both ends of the process (both as a purchaser for the Navy and working for a small electronics dealer who sold to Navy), I assure you there's nothing fishy at all about the story. When you're a buyer, if the price is right and the paperwork appears in order, you have no choice but to buy from the minor and unknown. You haven't the authority, or the time, to investigate.
:) :)
Regarding your 'honeypot' theory, I suspect you've been reading too much Clancy or watching too much NCIS.
Not to mention that it IS federal jurisdiction if you're doing business with the military.
Yep. Look around you, if you're in America. It's very easy for those who have always "had" to whine about perceived injustices (i.e., so-called 'reverse-racism'). However, what most American's don't understand is that Native Americans and African Americans are quite unique in their situation. One group had the land taken from them, and were slaughtered by the scores. The other group were taken from their land, and were enslaved by the scores.
All other nationalities and races have come to this country of their OWN FREE WILL, and can proudly trace back their heritage and lineage, for the most part.
I'll let you do the reading on that. In order to fully understand what you read, it would probably help if you WERE black or native American.
Chips? Chips!?
Apparently he sold them to some Admiral as potato chips but just as the admiral opens the packet and starts gobbling them he immediately notices that they are RICE chips. Not only that but they have a warning about anal leakage on the packet. Who puts anal leakage on their chips!?!!!?
These posts express my own personal views, not those of my employer
In 2006-2007 it was a problem to get many parts in the reasonable quality - flash, op-amps, multiplexors.
So we bought a few reels from the second-hand distributor.
As a result flash marked as 32Mb was 2Mb inside, op-amps weren't up to the specs (manufacturer confirm that they were made of written-off dyes), multiplexors were sold as a particular brand with advanced features while indeed were jelly beans for $0.10 a piece.
Thankfully we were able to rework boards before products hit the consumer market.
That was a good lesson for us to never use Chinese distributors for parts
NSSC = Naval Submarine Support Center
Naval Sea Systems Command = NAVSEA
this sig was brought to you by the letter
Comment removed based on user account deletion
How did this idiot not think he was going to get caught?
well there is a type of vacumm chamber that could kill you a vacuum chamber, or the vacuum of spce, which either if it malfunctuned and int the highly unlikely chance a person was stupid enough to get himself locked inside while his asistant decided to start the expierment they were to be working on and o i don't know set it to a air pressure equal to I don't know 126 miles the edge of space that would really that would really suck to be that guy dieng of suffication as the water and oxygen is sucked from his body. That could be also considered a vacuum cleaner as the vacuum has just cleaned his body of his water and oxygen.
Or just making it worse setting the air pressure equal to the bottom of an oceanic trench so vacuums can kill a person, and take that comment back but then again he'd make the a first place for the darwin award. don't think of those two very very very nasty ways to suck the life right out of one.
Lesson of the story vacuums can kill, all very very very very painfull, don't get your self stuck unprotected in space, nor at the bottom of the ocean, or particullary with a horrible absent minded assistant and an expierement with a vacuum chamber, not to bring a very un cheery comment to this disscussion, carry on.
nt
I can understand the vacuum company, but try to dupe the Navy?
Winkey shortcut mapping for 64bit windows. WinKeyPlus
What about the espionage implications here? I mean, the chips are from China, right?
Electronic synthesizer makers/hackers/repairers have problems with counterfeit chips too. The Roland TB-303 has a number of transistors that have not been made in decades. Some have suitable modern replacements, but others do not. You have to be very careful buying transistors and chips to repair old synths (like the Juno) because it can be hard to spot fakes from looks alone. Chip counterfeiters can be very good at replacing a chip's markings. Sometimes you don't find out that it's a fake until you get it soldered into the circuit. Ebay is the most popular place for these kinds of scams, but occasionally a reputable electronics retailer will be duped into carrying them.
France.
A company back in the mid-20th century always seemed to be able to find the mil-spec chips needed for military contracts.
Turns out they were pulling the same scam: Buying consumer- or seconds-grade chips (from Radio Shack even), grinding off the markings, and rebranding them to look like the mil-spec ones.
The first space shuttle prototype was named the Enterprise, due to public pressure. It was used for things like testing the piggyback transport plane and what-have-you, and the results of such testing used in final design changes for the flying fleet. It is rumored that NASA DID examine whether they could upgrade it to flight status and end up with one more shuttle, rejected the option due to the cost (higher than building another one), and that a major factor in the decision was the need to replace all the electronics due to concern that those counterfeit chips had ended up in the assemblies.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Is the Navy kidding? are they stupid? Why buy electronic components from unknown/obscure brokers who sell crap made in foreign countries? Why not buy directly from AMERICAN MANUFACTURERS, there are many: National Semiconductor, Freescale, Fairchild, just to mention. Or some other reputable manufacturers like Philips or Toshiba? Well, i'd rather buy from reliable american companies when national security is a major concern! It looks the Navy does not think so.
- This can't be... - Be what? Be real?
If your goal isn't to support profiling then what exactly was the point of that post? Point out a system is flawed? That's practically the first few things a child learns.
"Pentagon Components".
That must have fooled some guy at the navy thinking he was buying parts to another branch of the government?!
What's next? Not-counterfeit-R-Us?
suck it up!
Well I guess it goes to show our home pc cpus are just as good as the military brand cpus.
I guess maybe thats why they now by ps3s for their cpu power cycles, instead of overpriced chips that are counterfeit anyways!
We still make damn good ones. Say you need a vacuum for cleaning up ASH3 waste inside a semiconductor plant.
Nilfisk has one and it's only $5000.
http://www.nilfiskcfm.com/vacuum-applications/electronics-semiconductors.aspx
In GOD we trust, all others we monitor.
Because, as any fule kno, only Muslims have ever cracked and gone on a killing spree.
To have a right to do a thing is not at all the same as to be right in doing it
So the parent here gets mod'd as insightful because he doesn't know that the U.S. has enemies. So I post a response pointing out in common /. style that the U.S. has many current and potential enemies (we have 2 active wars going on for God's sake and an inactive state of war with North Korea) and I get mod'd as "offtopic"? How can you be offtopic when you are directly challenging a post that has been mod'd as insightful? Explain that for me please.
Very often, people confuse simple with simplistic. The nuance is lost on most. - Clement Mok