Aventura Technologies and seven of its executives have been charged with illegally importing Chinese-made security and surveillance equipment and claiming it to be made in the United States. The company, based in Commack, New York, claimed its security and surveillance products were made on Long Island. However, federal authorities say the products were actually manufactured in China and the company put fake “Made in the USA” labels on the equipment.
In a federal complaint unsealed Nov. 7, authorities claim that Aventura fraudulently sent Chinese made products to U.S. military and government agencies, creating a potential national security threat. U.S. Attorney Richard Donoghue said the equipment was installed at government agencies and military facilities, ending up at Army bases and even on an aircraft carrier. The equipment “… created a channel, by which foreign adversaries and other actors could potentially access our government’s most sensitive facilities and computer networks,” Donoghue said.
Seven current and former employees were charged in the indictment. Officials claim two company executives generated nearly $90 million in revenue over the past nine years. “The owners and operators of Aventura grew rich trading national security for personal profit,” Donoghue said.
Prosecutors arrested and charged Jack Cabasso, who led the company as its de facto CEO; his wife, Frances; and four other executives with conspiracy to commit wire and bank fraud, as well as unlawful importation of technology, according to the U.S. Attorney’s Office for the Eastern District of New York, which is overseeing the case. The government has already frozen $3 million in assets and seized a 70-foot yacht.
According to the indictment, Aventura had been importing the Chinese equipment and passing it off as U.S. made for 13 years. Prosecutors also alleged that much of the equipment contained security vulnerabilities that had previously been identified as a danger by the U.S. Department of Homeland Security. For example, firmware flaws in some cameras could allow unauthorized users to gain remote access to the equipment, according to the indictment. Some of the equipment had been installed to help secure facilities used by the Air Force, Navy, Army and Energy Department, prosecutors said.
The indictment raised concerns across security solutions providers and prompted the Security Industry Association (SIA) to release a statement.
“The Security Industry Association finds today’s charges issued by the U.S. District Court, Eastern District of New York, against Aventura Technologies and members of its management team to be very serious, and if true, would represent business practices that SIA does not condone. SIA strongly encourages its members to operate ethically and comply with all U.S. laws and regulations. SIA also continues to fully support federal government efforts to strengthen the integrity of our nation’s supply chain. The SIA Board of Directors has begun to review these charges and the status of Aventura’s membership in SIA.”
The arrests come at a time of increased scrutiny over Chinese products and whether this equipment is used to spy on U.S. government agencies. In 2018, President Donald Trump signed the 2019 Defense Authorization Act, which banned U.S. government agencies from using certain components and gear from a number of China-based firms including Huawei, ZTE, Hytera Communications, Hangzhou Hikvision Digital Technology Co. and Dahua Technology Co.