LI Company Sold Compromised Chinese-made Tech To U.S. Military, Feds Say

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Photo by www.houstondwiattorney.net

A Commack-based company imported Chinese-made surveillance technology with known cyber-security vulnerabilities, slapped “Made in The USA” labels on the products, and sold them to to the U.S. military for years, federal prosecutors alleged.

Those arrested Thursday in the alleged scheme include Avenutura Technologies, Inc. CEO Frances Cabasso, her husband and the company’s managing director, Jack Cabasso, both of Northport, plus three senior executives and two employees, authorities said. The suspects were scheduled to be arraigned at Brooklyn federal court on charges of defrauding the U.S. government, money laundering, and other counts.

“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,” said Richard P. Donoghue, U.S. Attorney for the Eastern District of New York.

Prosecutors alleged that Aventura made upwards of $88 million, including more than $20 million from federal government contracts, while claiming that it was manufacturing its products on Long Island.

Since at least 2006, Aventura has been importing products primarily from China, then reselling them as American-made or manufactured in a small number of other countries, authorities said.

The company also falsely claimed that Frances was CEO to qualify the company as a woman-owned small business to increase sales when it was in fact run by Jack, according to investigators. The couple is also accused to laundering their profits to hide their assets.

“The introduction of counterfeit parts and materials into the U.S. Defense Department’s supply chain poses a significant risk and impacts America’s military readiness and our national security,” said Leigh-Alistair Barzey, Special Agent-in-Charge of the Defense Criminal Investigative Service’s Northeast Field Office.

The couple faces up to 20 years in prison, if convicted.

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