US man arrested for counterfeit chip sales ‘put lives at risk’

The heads of an Orange County-based electronic component business has been arrested on charges that he sold fake integrated circuits that could have ended up in military applications.

Rogelio Vasquez (43) – who sometime called himself James Harrison – is accused of acquiring old, used ICs from Chinese suppliers and then disguising 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, says the federal government.

Some Xilinx ICs sold by Vasquez were military components and according to US Immigrations and Customs Enforcement (ICE) “the use, malfunction, and failure of which were likely to cause serious bodily injury and death, the disclosure of classified information, impairment of combat operations, and other significant harm to a combat operation, a member of the Armed Forces, and to national security.”

He is also accused of wire fraud, and specifically that he instructed Chinese suppliers to remark ICs and also engaged a testing laboratory in China that would provide two versions of its report – one which showed accurate test results and a second ‘sanitized version’ that according to ICE did not contain results of “any visual inspection and permanency or other marking tests, which would have revealed that the ICs were used, remarked and/or in poor condition.”

Vasquez is facing a long list of charges including nine counts of wire fraud, 20 counts of trafficking in counterfeit goods, and one count of trafficking in counterfeit military goods, and could face a lengthy prison term if convicted as trafficking in military counterfeits carries a maximum 20-year jail term.

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.