Feeds

Woman admits she helped sell bogus chips for military gear

China inside

Protecting against web application threats using SSL

A Florida woman has admitted she helped sell millions of dollars worth of counterfeit computer chips for use by the US military.

Stephanie A. McCloskey, 38, of Clearwater, Florida, pleaded guilty in federal court to one count of conspiracy for her role in the scheme, which netted $15.9 million over three years. The chips, which came from China and Hong Kong, bore counterfeit marks falsely claiming they were industrial-grade and military-grade goods made by companies such as Texas Instruments, according to court documents. VisionTech Components, the Clearwater company she worked for, claimed 95 percent of its chips were made in Europe.

US military officials have long been concerned about counterfeit hardware from China because its quality is often not good enough to be used in mission-critical systems. Worse still, officials worry that the knockoffs could have backdoors built into them that would allow spies to steal sensitive data or sabotage military gear. Marks stamped on the chips are intended to certify that they are certified for use in military systems.

VisionTech employees took special steps to cover their tracks. On a few occasions, its owner, Shannon L. Wren, “would run his fingernail through the number sequence on the box's label, thereby obliterating the number code, making it impossible for the recipient/buyer to discern if the code on the label matched the numbers on the devices contained in the box,” according to documents filed in US District Court in Washington DC.

Other times, when the counterfeit chips arrived in dirty condition, Wren “directed employees to use large erasers to remove debris and discoloration from the leads of the devices and essentially polish the leads on the integrated circuits making them appear to be in good condition.”

When the company received complaints about the quality of the chips, the preferred response was to offer the customer replacements. Even so, the company was forced to issue $1 million in refunds over three years.

McCloskey faces a maximum sentence of five years in prison and a fine of $250,000, although sentencing guidelines call for a fine that tops out at $125,000. She has also agreed to return $166,141 she received in salary. A sentencing hearing has not yet been scheduled. ®

Reducing the cost and complexity of web vulnerability management

More from The Register

next story
Spies would need SUPER POWERS to tap undersea cables
Why mess with armoured 10kV cables when land-based, and legal, snoop tools are easier?
Infosec geniuses hack a Canon PRINTER and install DOOM
Internet of Stuff securo-cockups strike yet again
Apple Pay is a tidy payday for Apple with 0.15% cut, sources say
Cupertino slurps 15 cents from every $100 purchase
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
YouTube, Amazon and Yahoo! caught in malvertising mess
Cisco says 'Kyle and Stan' attack is spreading through compromised ad networks
Hackers pop Brazil newspaper to root home routers
Step One: try default passwords. Step Two: Repeat Step One until success
Microsoft to patch ASP.NET mess even if you don't
We know what's good for you, because we made the mess says Redmond
NORKS ban Wi-Fi and satellite internet at embassies
Crackdown on tardy diplomatic sysadmins providing accidental unfiltered internet access
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.