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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."

9 of 327 comments (clear)

  1. Re:Treason by NiceGeek · · Score: 4, Insightful

    http://caselaw.lp.findlaw.com/data/constitution/article03/

    "Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort"

    Ripping them off isn't treason.

  2. Re:Ron Paul!!! by Duradin · · Score: 4, Insightful

    Because it was the free market and private enterprise that was doing the scamming?

    And if they are willing to pull this on the gov't then it really doesn't bode well for the rest of us peons.

  3. Re:Unconstitutional by Shakrai · · Score: 4, Insightful

    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.......

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  4. Re:Ron Paul!!! by Anonymous Coward · · Score: 4, Insightful

    Isn't there some confusion here? This is the free market at work; if it wasn't, the Navy would have their own fabs and employ wafer process techs as well as sailors and airplane mechanics. This is outside the brief of the government, especially the Navy, hence the government buying the fake chips from a private contractor. They didn't do enough due diligence and got burned -- isn't that what's supposed to happen when there's an information imbalance in a market?

  5. Re:uuuh by Shakrai · · Score: 4, Insightful

    I suggest you start a small business owned by a woman who is a minority.

    Why is it (properly, IMHO) called racism and/or sexism if someone gives favoritism to a white male but doing the inverse is just fine and dandy?

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    I want peace on earth and goodwill toward man.
    We are the United States Government! We don't do that sort of thing.
  6. Re:uuuh by TubeSteak · · Score: 4, Insightful

    Why is it (properly, IMHO) called racism and/or sexism if someone gives favoritism to a white male but doing the inverse is just fine and dandy?

    2 generations ago: negros were riding on the back of the bus (1949)
    3 generations ago: women hadn't yet been given the right to vote (1919)

    The short version is: because we say so.
    The full version might have something to do with the long and storied
    history of racism, sexism, and exploitation throughout human history.

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  7. Re:Ron Paul!!! by Jackie_Chan_Fan · · Score: 4, Insightful

    The government is not at fault. The owner of those businesses is. The government looked for a seller within our free market, and that seller conspired to fool the government.

    If anything, this says more negative about the free market, and the willingness of people to do illegal things out of selfish greed.

    The government is the people. It is for the people, by the people. If the government is so "fucked up" as you say it is, than perhaps its just a reflection of our citizens.

    We need to be BETTER PEOPLE for ourselves, and our fellow Americans.

  8. Re:Treason by QuoteMstr · · Score: 4, Insightful

    First of all, the charge of treason is obviously inappropriate. Fraud it is.

    But to your other point, using a low-spec chip can certainly lead to lower reliability. What if the ersatz chip has less forgiving temperature than the real thing? What if the software running on it assumes it can respond within 50us to an external input, but because the ersatz chip is running at a lower clock speed, the response time is 100us? That could be the difference between your anti-ship-killer-missile cannon hitting the target and you surviving, or it missing and you dying.

    This is serious.

  9. Re:Amusement du jour: by Tuoqui · · Score: 4, Insightful

    Yep I suppose we're gonna get a whole bunch of these 'Counterfeit Goods' stories hitting the media in the next year or so to make people think we absolutely positively must pass the ACTA treaty the RIAA/MPAA have been working on in secret.

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