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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."
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.
You can get away with fraud when dealing with the government. It's the Vacuum company that got them in trouble. The government would have probably went on for a few more years buying them if it wasn't for these people getting greedy and going after the lucrative vacuum market.
-EL
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?'
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.
Are you familiar with efforts to foster American small businesses in the United States by the government (note this is nothing specific to Obama)? If you want to get into government contracts, I suggest you start a small business owned by a woman who is a minority. You'd be amazed at how easily you can land contracts and subcontracts as the government and big contractors strive to make quotas.
My work here is dung.
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.
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.
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?
HOW does a man and his family sell ANYTHING to the Navy? Is the Navy getting their parts from eBay or Craig's List?
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?
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
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.
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!
apparently the fake chips are made with less than 50% potato, have a weird taste and are sold in a can.
This is Slashdot damnit! Logic has no reason here.
Life is not for the lazy.
I knew those couldn't have been real Doritos
What happened is that they went with the cheapest (lowest bid) contractor. The other guys who bid on the contract probably had legit chips to sell and couldn't compete with the cheaters.
This is why the government's practice of having to accept the lowest bid is just fucking dumb. They always get ripped off.
Look at any of your local construction projects. The lowest bidder got that job. Now the job is over budget and behind schedule.
They rarely go with the best, most qualified bidder.
because the only chips in my vacuum cleaner are doritos that fell on the floor.
... 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.
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.
[Fuck Beta]
o0t!
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.
I don't think this is an issue of Due Diligence - blame the goverment blah blah blah - it's an issue of THEY LIED. They stated the chips were one thing / one grade and turned out they were another grade entirely.
It's reasonable to expect regular consumers in the marketplace to perform due diligence but when a person claims the product is the product and it appears that way then the person has performed due deligence. Requiring the person to inspect fab plants and everything else for every manufacturer is not due diligence - it's a hassle.
Let's get out of this blame the government mantra - the politico talking heads are having enough fun as it is. This is a criminal issue for which the company should be nailed pretty harshly. The goverment should get it's retribution through whatever means are most expedient.
There's a gorilla from Manilla whose a fella that stinks of vanilla and has salmonella.
The full version might have something to do with the long and storied
history of racism, sexism, and exploitation throughout human history.
I see, so this is just history repeating itself.
For a moment there I thought two wrongs don't make a right.
What were white men doing two or three generations ago?
While some of them were probably benefiting greatly from institutionalized sexism and racism, others were part of the poor, downtrodden masses.
Even today, there are places that are very white and very poor, where there is little opportunity, and crime and poverty runs rampant.
So why do we assume all white men don't need any additional help?
Is it because of the color of their skin and their gender?
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
No, it doesn't. A counterfeit is something that has been made or altered to appear to be something other than what it is, it may well act the same (indeed, "acting" the same under various tests is a key part of counterfeiting some things.)
A counterfeit chip may well be one designed to perform the same function (e.g., in terms of logic), at least under normal conditions, but with different origins, QC, and/or range of designed operating conditions from the brand it is passed off as. Indeed, it would pretty much have to be not be noticed as soon as it was used.
"Copies produced without authorization" is quite a mouthful. If only there was an adjective that means that already, so the same idea could be expressed more concisely.
Or, in short, in response to "what does counterfeit mean?" -- RTFDictionary.
What about that guy that sold them the fake "Mission Accomplished" banner for their aircraft carrier?
I would suspect that for certain chips, manufacturers do the same thing Intel/AMD do in terms of speed ratings. They make the chip, then test it at different conditions, and whichever chip passes the more stringent requirements gets labeled milspec. So the same silicon design could be designated different things.
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.
The full version might have something to do with the long and storied history of racism, sexism, and exploitation throughout human history.
Interesting. So I'm being punished because of the crimes of my fathers.
Actually, scratch that. My family came to the states from Germany in the 1930s and laid down roots in the Northeast. So they had nothing to do with slavery, Jim Crow or the lack of female voting rights. So, I'm actually being punished for the crimes of dead people just because I have roughly the same melanin levels that they did.
Yeah, that's totally fair and just.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
This is the strangest definition of fraud. Smacks of a mail order degree in popular economics with hand typed training materials.
What a company is selling is a chip that conforms to its spec. sheet. If the military version has a different spec. sheet, they can charge any price they like for putting into effect the QC process which allows them to stand behind those claims.
It's not even in the military's interest to squeeze these vendors on price. That would only result in niche products the military depends upon being discontinued faster than ever. There's real cost here. You've got to keep some old guy around who remembers details about products you rarely sell, in case the military comes calling. If a company fails to maintain this courtesy, it won't long find itself on the preferred vendor list for new designs.
The way out of this price trap is for the military to toss their aircraft carriers onto the landfill at the same rate consumers dispose of their cell phones. Then they can quote for volume on parts rated for a short rough-and-tumble service life and only pay twice as much as the common man.
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
Argumentum ad hominem abusive does not belong in civilized discussion. I thought this was taught in elementary school. Since you bring up, I am curious as to where you got your education? It appears you neither understand my comment, and you also do not understand the marketplace.
It is common, and well documented that early production of ICs often have few chips in the highest performance bin. These chips are then sold at a high premium. Later the process matures, and often all chips go into the highest performance bin. To still get the premium price this bin used to command, many of these are now derated. There are also many other reasons manufacturers sell the same silicon with different rating printed on the part.
BTW, I have negotiated and sold products for military and aerospace use for decades. This includes ASICs and other in-house developed silicon.
Can you give any examples of any of your claims?
don't cut it off www.mgmbill.org