BROOKLYN, N.Y. (CN) – Federal prosecutors unsealed an indictment Thursday that charges a Long Island tech company with rebranding Chinese-made security equipment as “Made in the U.S.A.” before selling them to the U.S. military.
The complaint takes aim at Aventura Technologies Inc., run by Jack Cabasso, whcih allegedly raked in $88 million, including more than $20 million in federal government contracts, through the conspiracy since 2006.
“As they operated this scheme for more than a decade, the owners and operators of Aventura were rich, trading our national security for personal profit,” U.S. Attorney Richard Donoghue told reporters this morning at his Brooklyn office.
Cabasso’s wife, Frances Cabasso, is charged as well. Though she worked as a bookkeeper at an unrelated company, Frances allegedly pretended to be Aventura’s CEO so the company could access government grants intended for small women-owned businesses.
Aventura did not actually manufacture anything, but merely imported products from other manufacturers and added “Made in U.S.A.” stickers to disguise the equipment as having been made at its headquarters in Commack, not China.
“Some of these PRC-manufactured systems had known cybersecurity vulnerabilities,” Donoghue said, abbreviating People’s Republic of China.
A member of the U.S. Air Force raised alarm bells in August 2018 after spotting Chinese characters on the screen of a body camera the Air Force had bought from Aventura about three months earlier, according to the complaint.
Further inspection of the camera found preloaded images of the U.S. Air Force Logo, the Chinese Ministry of Public Security and a logo of an unnamed manufacturer owned by the Chinese government.
“So obviously when you have Chinese-made cameras, with PRC software loaded into them, the network is a sensitive installation such as army bases, navy bases … and even American aircraft carriers, that causes great concern for our national security,” Donoghue said.
The complaint sets forth that there were “known cybersecurity risks here.” Whether the U.S. knows if China was actually able to cull any information as a result of the fraud, however, Donoghue did not say.
Both Donoghue and the complaint stopped short of making allegations against the Chinese government, but he prosecutor said: “You can see that individuals in China were well aware where this was going.”
He also said the U.S. was in the process of removing all the tainted equipment. Meanwhile, the government seized a 70-foot yacht belonging to the Cabassos, as well as $3 million.
Jack Cabasso has a decades-long criminal history: He was convicted of jury tampering in 1992, and in the 1980s convicted of several state crimes including attempted grand larceny, according to the government’s detention memo.
Senior Aventura executives Jonathan Lasker, Christine Lavonne Lazarus and Eduard Matulik; current employee Wayne Marino; recently retired employee Alan Schwartz; and Aventura are all named as defendants in addition to the Cabassos. All but Matulik are set to be arraigned Thursday afternoon in Brooklyn; he has said he’ll surrender, according to a spokesperson at the U.S. Attorney’s Office.