A Long Island security company has been busted for duping US military forces into spending millions on vulnerable Chinese-made equipment by slapping "Made in USA" labels on its products, federal prosecutors revealed Thursday.
The equipment made in China and sold by Aventura "as purportedly US -made has been installed on dozens of Army, Navy and Air Force bases, Department of Energy facilities and, among other places, on Navy aircraft carriers", prosecutors said in the criminal complaint.
Prosecutors say the corporate billed its merchandise as home made - with some even baring phony "Made within the U.S. labels - despite the fact that they have been really smuggled into the States from China and elsewhere".
Frances Cabasso is identified as owner and chief executive officer of the company; however, four of the defendants are charged with claiming, falsely, that Frances Cabasso was CEO when the company was in fact run by her spouse, Jack Cabasso.
The company's largest customers are USA government agencies including the Army, Navy and Air Force, though it also sold to private companies, making about US$88 million since 2010, prosecutors said.
Aventura Technologies Inc. has sold at least $88 million in technology - such as walk-through metal detectors and network-linked surveillance cameras and turnstiles - to customers including to the United States military, since November 2010. The products Aventura claimed to manufacture had "known cybersecurity vulnerabilities", he said.
U.S. Attorney Richard Donoghue called the fraud scheme a national security threat. "So obviously when you have Chinese-made cameras with PRC software loaded into them ... that causes great concern for our national security".
Prosecutors said in court papers that Jack Cabasso should not be released on bail because his wealth, foreign connections and "lengthy criminal history", including a conviction for tampering with a jury in an earlier fraud case against him, point to a high risk that he will flee the country.
The defendants had gone to lengths to hide any footprint of the products Chinese origin, prosecutors said, including requiring a Chinese supplier to erase its initials from the product's circuit board. Six of the people have been arrested, including Jack Cabasso, the man accused of leading the scheme.
Investigators caught wind of Aventura's scheme through several clues, Donoghue said.
The provenance of the gadgets weren't the only lies investigators found, prosecutors allege.
The couple is being accused of lying in order to extend and obtain government contracts reserved for women-owned businesses.
Phone messages seeking comment were left Thursday with Cabasso's attorney and at Aventura's headquarters in Commack, New York. Six of the seven were charged today in a NY federal district court.
If convicted of the alleged crimes, the defendants each face up to 20 years' imprisonment on each charge in the in complaint, according to authorities. Now seven current and former employees are facing charges.