US chip counterfeiter gets 46 month sentence

A US company owner has been sentenced to almost four years in prison for selling counterfeit chips that ended up in military equipment.

Rogelio Vasquez (44) of Orange County, California, pleaded guilty in January to four felony counts in a 30-count indictment handed down in February last year.

The indictment alleged that he acquired from sources in China old, used and/or discarded integrated circuits that were modified so they could be resold as if they were new. He disguised them with a new paint job and added logos and new date, lot codes and country information.

That allowed him to pass them off as genuine, new products, from well-recognised manufacturers such as Xilinx, Analog Devices and Intel, to unsuspecting customers of his PRB Logistics Corp business.

Some Xilinx ICs sold by Vasquez were military components and could have jeopardised combat operations and put the lives of service personnel at risk. According to the government, Vasquez sold the fake parts between July 2009 to May 2016.

US District Judge Josephine Staton sentenced Vasquez to 46 months behind bars and ordered him to pay $144,000 in restitution. He has also agreed to forfeit $97,362 in cash and 169,148 counterfeit integrated circuits that were seized during the investigation.

“America’s warfighters depend upon the reliability of Department of Defense weapons systems,” said Special Agent in Charge, Michael Mentavlos, Defense Criminal Investigative Service, Southwest Field Office.

“The intentional substitution of counterfeit and defective parts in these systems impacts our national security, and places our military at risk. We will not tolerate this criminal behaviour, and will aggressively bring to justice all those who would perpetrate these acts on our nation."

In 2010/2011 the US Department of Defense said it had identified upwards of a million counterfeit components in the military supply chain, while a report from market research firm IHS published in 2013 indicated there had been more than 12m reports of counterfeit electronics parts in the prior five years.