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Man Pleads Guilty To Selling Fake Chips To US Navy

timothy posted more than 4 years ago | from the vinegar-was-ersatz-too dept.

The Military 327

itwbennett writes "Neil Felahy of Newport Coast, California, has pleaded guilty to conspiracy and counterfeit-goods trafficking for his role in a chip-counterfeiting scam. Felahy, along with his wife and her brother, operated several microchip brokerage companies under a variety of names, including MVP Micro, Red Hat Distributors, Force-One Electronics and Pentagon Components. 'They would buy counterfeit chips from China or else take legitimate chips, sand off the brand markings and melt the plastic casings with acid to make them appear to be of higher quality or a different brand,' the US Department of Justice said in a press release. The chips were then sold to Naval Sea Systems Command, the Washington, DC group responsible for maintaining the US Navy's ships and systems, as well as to an unnamed vacuum-cleaner manufacturer in the Midwest."

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we still make vacumm cleaners? (4, Funny)

Shakrai (717556) | more than 4 years ago | (#30229854)

That sucks ;)

Re:we still make vacumm cleaners? (2, Funny)

Anonymous Coward | more than 3 years ago | (#30229938)

Not only that, I read it as an unarmed vacumm manufacturer...

Re:we still make vacumm cleaners? (4, Funny)

Monkeedude1212 (1560403) | more than 3 years ago | (#30229982)

The chips were then sold to Naval Sea Systems Command, the Washington, D.C., group responsible for maintaining the US Navy's ships and systems, as well as an unnamed vacuum-cleaner manufacturer in the Midwest.

Wait wait wait...

Were the chips sold to both the NSSC and a Vacuum-cleaner manufacturer -

Or is the NSSC responsible for maintaining the US Navy's ships, as well as a Vacuum-cleaner manufacturer?

I think the ambiguity is amusing.

Re:we still make vacumm cleaners? (2, Funny)

CannonballHead (842625) | more than 3 years ago | (#30230284)

Wasn't there a President named Hoover? ...

Re:we still make vacumm cleaners? (1)

Z00L00K (682162) | more than 3 years ago | (#30230336)

At least a vacuum cleaner that dies won't kill anybody.

Re:we still make vacumm cleaners? (1)

relaxinparadise (943965) | more than 3 years ago | (#30230504)

I could see a bad vac chip causing an electrical failure in which a fire starts and burns down the house with potential fatalities, a stretch for sure, but a cow caused a fire to burn down a city before so weird things do happen.

Re:we still make vacumm cleaners? (0)

Anonymous Coward | more than 3 years ago | (#30230514)

What about that one from Maximum Overdrive?

Re:we still make vacumm cleaners? (3, Funny)

Naturalis Philosopho (1160697) | more than 3 years ago | (#30230532)

At least a vacuum cleaner that dies won't kill anybody.

Yeah, if our targeting information was off and missile fell into the sea instead of hitting a house somewhere...oh, wait.

Really, how many did the Navy buy? When we take deliveries we don't pay until we've tested that we've gotten what we've paid for and that's written into our purchase contracts.

Unconstitutional (-1, Troll)

cumadore69_luv (1684882) | more than 4 years ago | (#30229870)

This is not authorized by the Constitution. "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." In other words the right to regulate chip counterfeiting belongs to your local State government, until you expand the Constitution with an amendment. Also, I enjoy receiving anal pleasure in truck stop bathrooms; you could say I have a wide stance.

Re:Unconstitutional (4, Insightful)

Shakrai (717556) | more than 3 years ago | (#30230010)

In other words the right to regulate chip counterfeiting belongs to your local State government, until you expand the Constitution with an amendment

Wrong. This is actually a proper use of the Interstate Commerce Clause. Now arresting some poor bastard for growing pot for his own personal use on the other hand.......

Amusement du jour: (5, Funny)

migla (1099771) | more than 4 years ago | (#30229876)

I'm imagining someone selling the Navy fake ships.

Re:Amusement du jour: (5, Funny)

Tired and Emotional (750842) | more than 3 years ago | (#30230230)

Its worse than that. We've been firing vacuum cleaners at enemy aircraft.

Re:Amusement du jour: (4, Funny)

hrimhari (1241292) | more than 3 years ago | (#30230368)

Latest US Navy project: Mega Maid. [youtube.com]

Re:Amusement du jour: (1)

Tablizer (95088) | more than 3 years ago | (#30230500)

Its worse than that. We've been firing vacuum cleaners at enemy aircraft.

Man, that....sucks. But the upside is that we don't have to clean up the wreckage.

Re:Amusement du jour: (3, Funny)

The Grim Reefer2 (1195989) | more than 3 years ago | (#30230304)

I'm imagining someone selling the Navy fake ships.

I was thinking that someone had sold them Pringles.

Re:Amusement du jour: (2, Funny)

Thud457 (234763) | more than 3 years ago | (#30230474)

This sounds like "Our Man in Havana"

come on guys, it had Obi Wan it it!!!

Treason (2, Insightful)

koan (80826) | more than 4 years ago | (#30229886)

You know the penalty.

Re:Treason (1)

Mononoke (88668) | more than 3 years ago | (#30229926)

I agree with this suggestion.

Re:Treason (4, Insightful)

NiceGeek (126629) | more than 3 years ago | (#30229956)

http://caselaw.lp.findlaw.com/data/constitution/article03/ [findlaw.com]

"Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort"

Ripping them off isn't treason.

Re:Treason (3, Interesting)

TheRealMindChild (743925) | more than 3 years ago | (#30230042)

I don't know. Knowing selling the Navy computer components you KNOW would fail, to me, would fall into "giving aid to the enemy". We could argue intention/motivation, but a crime is a crime, regardless what you meant.

Re:Treason (3, Insightful)

NiceGeek (126629) | more than 3 years ago | (#30230210)

What "enemy"?

Re:Treason (2, Funny)

hrimhari (1241292) | more than 3 years ago | (#30230380)

Why, all of them, whoever they are!

Re:Treason (3, Informative)

Runaway1956 (1322357) | more than 3 years ago | (#30230454)

Old destroyer man here. Nature and the elements are one enemy that sailors battle every day. Not to mention Al Queda and assorted terrorists such as the ones who attacked the USS Cole. Pointing out that Iran is already geared up for war in the Strait of Hormuz, The Persian Guf, and the Sea of Oman is probably redundant.

No, treason is probably not an appropriate charge against these idiots, but I felt it necessary to point out that the US Navy is never at "peace". There are always operations taking place in which men's lives are in peril. Some of the most dangerous things pulled of by destroyers and small craft never make the news at all. Shipboard equipment is tested to it's limits daily, and lives depend on that equipment operating properly.

Care to step aboard an aircraft carrier? During flight operations, no matter how peaceful, there is more danger in one 24 hour day than most people can imagine.

Re:Treason (0, Offtopic)

Old97 (1341297) | more than 3 years ago | (#30230486)

Which enemy?

Fixed that for you.

Re:Treason (1)

jaymz2k4 (790806) | more than 3 years ago | (#30230252)

I don't doubt that these chips probably were much more likely to fail and be of in general far lower quality but it does sound like he was doing what many bar owners do with their vodka - buy the cheap one and sell it expensively to those that want that particular brand.

This is of course totally wrong but I don't think the intention was to supply chips that would knowingly fail as an ultior motive. I think he was basically saying I get chip-X for $10, they want chip-Y that does the same thing but costs $50. If he's rebranding chips, they must've done the same job when in place. I don't think his motive was one of causing chaos, just money.

Re:Treason (2, Insightful)

Darkness404 (1287218) | more than 3 years ago | (#30230412)

For one, you didn't know that it was going to fail. This would be equivalent to me selling a VIA C7 as a Celeron D. Fraud, yes. But a VIA CPU is not more likely to fail than an Intel CPU. Its a cheaper, lower performance CPU, but I wouldn't call it treason to sell to the Navy.

And for the other, who is the "enemy"? It doesn't give aid to the non-existent "enemy", it simply gives you more money. They should be prosecuted for fraud, not treason.

Re:Treason (4, Insightful)

QuoteMstr (55051) | more than 3 years ago | (#30230484)

First of all, the charge of treason is obviously inappropriate. Fraud it is.

But to your other point, using a low-spec chip can certainly lead to lower reliability. What if the ersatz chip has less forgiving temperature than the real thing? What if the software running on it assumes it can respond within 50us to an external input, but because the ersatz chip is running at a lower clock speed, the response time is 100us? That could be the difference between your anti-ship-killer-missile cannon hitting the target and you surviving, or it missing and you dying.

This is serious.

Re:Treason (2, Interesting)

TooMuchToDo (882796) | more than 3 years ago | (#30230428)

We could argue intention/motivation, but a crime is a crime, regardless what you meant.

You are aware that laws are based on intention, right? Like how manslaughter and murder are different based on intention?

Re:Treason (5, Interesting)

couchslug (175151) | more than 3 years ago | (#30230246)

Selling fake/incorrect components should be prosecuted as sabotage, because defective components can degrade vital systems and cause casualties.

Re:Treason (0)

Anonymous Coward | more than 3 years ago | (#30230150)

The presidency?

Seriously? (1)

Monkeedude1212 (1560403) | more than 4 years ago | (#30229892)

You thought you could get away with fraud while dealing with the government?

Might as well as try robbing a police station.

Re:Seriously? (5, Funny)

elzurawka (671029) | more than 3 years ago | (#30229962)

You can get away with fraud when dealing with the government. It's the Vacuum company that got them in trouble. The government would have probably went on for a few more years buying them if it wasn't for these people getting greedy and going after the lucrative vacuum market.

Re:Seriously? (1)

SnarfQuest (469614) | more than 3 years ago | (#30230418)

They should have been suspicious when they were offered the option of barbeque or sour cream.

Re:Seriously? (1)

Lally Singh (3427) | more than 3 years ago | (#30230458)

I've heard some pretty amazing government fraud stories. The best so far is a guy just making a bill in Excel and sending it to the Navy. They ended up paying $3 mil before catching him.

Re:Seriously? (1)

Applekid (993327) | more than 3 years ago | (#30230518)

You thought you could get away with fraud while dealing with the government?

Might as well as try robbing a police station.

The trick was that not enough of the ill-gotten gains was winding up lining the pockets of government officials.

Ron Paul!!! (0, Flamebait)

BitHive (578094) | more than 3 years ago | (#30229914)

This is why the government shouldn't be allowed any more money than is needed to keep the lights on in the capitol, they always fuck things up! When will people learn to temper their bigoted distrust of the free market and private enterprise?

Re:Ron Paul!!! (4, Insightful)

Duradin (1261418) | more than 3 years ago | (#30230008)

Because it was the free market and private enterprise that was doing the scamming?

And if they are willing to pull this on the gov't then it really doesn't bode well for the rest of us peons.

Re:Ron Paul!!! (1)

Katchu (1036242) | more than 3 years ago | (#30230018)

Thank you Neil Felahy of Newport Coast, California for reminding us to trust you.

Re:Ron Paul!!! (4, Insightful)

Anonymous Coward | more than 3 years ago | (#30230022)

Isn't there some confusion here? This is the free market at work; if it wasn't, the Navy would have their own fabs and employ wafer process techs as well as sailors and airplane mechanics. This is outside the brief of the government, especially the Navy, hence the government buying the fake chips from a private contractor. They didn't do enough due diligence and got burned -- isn't that what's supposed to happen when there's an information imbalance in a market?

Re:Ron Paul!!! (2, Insightful)

Anonymous Coward | more than 3 years ago | (#30230256)

What happened is that they went with the cheapest (lowest bid) contractor. The other guys who bid on the contract probably had legit chips to sell and couldn't compete with the cheaters.

This is why the government's practice of having to accept the lowest bid is just fucking dumb. They always get ripped off.

Look at any of your local construction projects. The lowest bidder got that job. Now the job is over budget and behind schedule.

They rarely go with the best, most qualified bidder.

Re:Ron Paul!!! (1)

FooAtWFU (699187) | more than 3 years ago | (#30230438)

It's Gresham's Law in action: Bad money drives out the good (or in this case, bad components). If no one can tell the difference, then people will substitute inferior products, and pocket the extra money (or use it to expand at the expense of those suppliers with superior products who can't make the same margins).

I wouldn't say it's "how the free market is supposed to work" as that implies something positive and normative to be pursued; it's just an aspect of the free market (and many less-than-free markets which might seek to replace them, cf. nail quotas in Soviet Russia) that ultimately must be addressed by fixing the information imbalances.

Re:Ron Paul!!! (3, Insightful)

CTalkobt (81900) | more than 3 years ago | (#30230490)

Huh?

I don't think this is an issue of Due Diligence - blame the goverment blah blah blah - it's an issue of THEY LIED. They stated the chips were one thing / one grade and turned out they were another grade entirely.

It's reasonable to expect regular consumers in the marketplace to perform due diligence but when a person claims the product is the product and it appears that way then the person has performed due deligence. Requiring the person to inspect fab plants and everything else for every manufacturer is not due diligence - it's a hassle.

Let's get out of this blame the government mantra - the politico talking heads are having enough fun as it is. This is a criminal issue for which the company should be nailed pretty harshly. The goverment should get it's retribution through whatever means are most expedient.

Re:Ron Paul!!! (1)

omnichad (1198475) | more than 3 years ago | (#30230038)

Since when did they need real money from us? They either print their own or borrow it from China.

Re:Ron Paul!!! (1)

h4rr4r (612664) | more than 3 years ago | (#30230106)

Was it not a private enterprise that sold these fake chips?

Re:Ron Paul!!! (0)

Anonymous Coward | more than 3 years ago | (#30230382)

Yeah, where do they get off thinking about defense of the homeland, disaster relief, and caring about the welfare of children that can't take care of themselves.

The nerve!

Re:Ron Paul!!! (4, Insightful)

Jackie_Chan_Fan (730745) | more than 3 years ago | (#30230450)

The government is not at fault. The owner of those businesses is. The government looked for a seller within our free market, and that seller conspired to fool the government.

If anything, this says more negative about the free market, and the willingness of people to do illegal things out of selfish greed.

The government is the people. It is for the people, by the people. If the government is so "fucked up" as you say it is, than perhaps its just a reflection of our citizens.

We need to be BETTER PEOPLE for ourselves, and our fellow Americans.

uuuh (1)

masshuu (1260516) | more than 3 years ago | (#30229934)

whats wrong with sony, samsung, or intel. I'm sure they could produce chips for government related applications, not some shady business no ones heard of before.

Re:uuuh (5, Informative)

eldavojohn (898314) | more than 3 years ago | (#30230002)

whats wrong with sony, samsung, or intel. I'm sure they could produce chips for government related applications, not some shady business no ones heard of before.

Are you familiar with efforts to foster American small businesses in the United States by the government [barackobama.com] (note this is nothing specific to Obama)? If you want to get into government contracts, I suggest you start a small business owned by a woman who is a minority. You'd be amazed at how easily you can land contracts and subcontracts as the government and big contractors strive to make quotas.

Re:uuuh (4, Insightful)

Shakrai (717556) | more than 3 years ago | (#30230046)

I suggest you start a small business owned by a woman who is a minority.

Why is it (properly, IMHO) called racism and/or sexism if someone gives favoritism to a white male but doing the inverse is just fine and dandy?

Re:uuuh (2, Funny)

DigiShaman (671371) | more than 3 years ago | (#30230200)

This is Slashdot damnit! Logic has no reason here.

Re:uuuh (0, Flamebait)

Rogerborg (306625) | more than 3 years ago | (#30230254)

I suggest you start a small business owned by a woman who is a minority.

Why is it (properly, IMHO) called racism and/or sexism if someone gives favoritism to a white male but doing the inverse is just fine and dandy?

Asking that question is worse than anything that Hitler ever did. That's why.

Re:uuuh (1)

CannonballHead (842625) | more than 3 years ago | (#30230354)

Hitler had a foreign accent.

To most Americans (I am an American, by the way), anything stated in a foreign accent (especially British, for some reason) automatically has a better chance at being accepted as true.

:)

Re:uuuh (4, Insightful)

TubeSteak (669689) | more than 3 years ago | (#30230342)

Why is it (properly, IMHO) called racism and/or sexism if someone gives favoritism to a white male but doing the inverse is just fine and dandy?

2 generations ago: negros were riding on the back of the bus (1949)
3 generations ago: women hadn't yet been given the right to vote (1919)

The short version is: because we say so.
The full version might have something to do with the long and storied
history of racism, sexism, and exploitation throughout human history.

Re:uuuh (1)

JonStewartMill (1463117) | more than 3 years ago | (#30230430)

There's only two places where that question would be considered "insightful": slashdot and Fox News.

Re:uuuh (0)

Anonymous Coward | more than 3 years ago | (#30230510)

Sure, but do they take into account if a white man employs mostly minority women in the small business? Or if the minority woman employs mostly white men?

Re:uuuh (1)

TooMuchToDo (882796) | more than 3 years ago | (#30230442)

Welcome to reverse discrimination.

Re:uuuh (0)

Anonymous Coward | more than 3 years ago | (#30230476)

I suggest you start a small business owned by a woman who is a minority.

Why is it (properly, IMHO) called racism and/or sexism if someone gives favoritism to a white male but doing the inverse is just fine and dandy?

Why was Microsoft convicted because it bundled Explorer with Windows, while Apple can do the same with Safari and Mac OS X with impunity?

Hint: not being the top dog having a virtually complete hold over the market/society means that you get more perks in order to help the underdogs (in case of the market: to get healthier competition; in case of society: to get better representation of all of society throughout all of its levels, rather than concentrating some at the bottom and some at the top -- because time has shown again and again that this is a perfect recipe for civil unrest due to disillusioned people who no longer believe in the "everyone has equal opportunities" motto).

Re:uuuh (1, Interesting)

Anonymous Coward | more than 3 years ago | (#30230172)

That's why on the government forms I said I was multiracial I'm part Anglo and part Saxon. I didn't come form Caucasia [google.com] so I never check that box.

Makes you wonder, though...what else? (1)

romonster (940984) | more than 3 years ago | (#30229940)

Wonder what else our armed forces and government have purchased that is fake or just plain doesn't work the way it should...

Re:Makes you wonder, though...what else? (1)

couchslug (175151) | more than 3 years ago | (#30230400)

Plenty of stuff, I'm sure.

With all the efforts at security, why did people with obviously Muslim names make it into the bidding process without triggering immediate investigation?

Re:Makes you wonder, though...what else? (1)

h4rr4r (612664) | more than 3 years ago | (#30230416)

So security = racism?

Also useless security because if I was a terrorist I sure as hell would be changing my name to John Smith ASAP.

Kntel (0, Troll)

feedayeen (1322473) | more than 3 years ago | (#30229942)

If "Kntel's" chips are just as good as Intel's, why should the military care? If they don't, hold them responsible for the difference, financial loses if we had to order more and if anyone died because of malfunctions.

Can someone please explain the crossover here? (5, Funny)

xpuppykickerx (1290760) | more than 3 years ago | (#30229950)

The chips were then sold to Naval Sea Systems Command, the Washington, D.C., group responsible for maintaining the US Navy's ships and systems, as well as an unnamed vacuum-cleaner manufacturer in the Midwest.

Has our Navy gone from suck to blow?

Re:Can someone please explain the crossover here? (1)

Dr. Eggman (932300) | more than 3 years ago | (#30230110)

Nah, they're just the only two who fell for it (why else would the fakers keep needing new aliases?) In truth, the vacuum-cleaner manufacturer probably did know they were fake and didn't care.

Re:Can someone please explain the crossover here? (1)

oldspewey (1303305) | more than 3 years ago | (#30230124)

I think it's funny how the defence organizations are named in detail, while the vacuum-cleaner manufacturer must remain unnamed ... presumably due to security concerns.

Re:Can someone please explain the crossover here? (2, Insightful)

chord.wav (599850) | more than 3 years ago | (#30230288)

That's a typo. I'm sure they've meant "UNMANNED vacuum-cleaner" like the Roomba.

Re:Can someone please explain the crossover here? (1)

couchslug (175151) | more than 3 years ago | (#30230300)

"Has our Navy gone from suck to blow?"

Don't ask, don't tell!

Balls (2, Interesting)

SmallFurryCreature (593017) | more than 3 years ago | (#30229954)

Scamming someone who can answer the question, "you and what army". Oh okay, so their answer is "not army, marines" but still. Takes guts.

And with the US being involved in two wars, I think the sentence for this might actually be a cigarette, against a nice sunny wall. Blindfold optional.

Re:Balls (1)

NiceGeek (126629) | more than 3 years ago | (#30229998)

Unless said counterfeiters were actually conspiring with our "enemy du jour", then this doesn't fit the Constitutional definition of treason.

Re:Balls (1)

Rogerborg (306625) | more than 3 years ago | (#30230212)

Dude, you are either with us, or with the terrorists. Didn't you get the memo [yc2.net] ?

Chips..? (4, Funny)

Burning1 (204959) | more than 3 years ago | (#30229984)

Chips? Chips!?

Common, this is Slashdot. Chips? The technical jargon in the summary is horribly confusing.

For clarity, could we please use a more generic term, such as 'computer thingamajiggy?'

Re:Chips..? (1)

sajuuk (1371145) | more than 3 years ago | (#30230054)

I know, I looked at the title and thought it was referring to FOOD.

Re:Chips..? (1)

Wyatt Earp (1029) | more than 3 years ago | (#30230350)

This place's original title was - Chips and Dips - back in '97 when I first came across the place.

MX missile guidance systems from Radio Shack (0)

Anonymous Coward | more than 3 years ago | (#30230004)

Way back there are accusations of ots parts from a retail radio shack that ended up in MX missile guidance systems. And it wasn't some mom and pop shop. It was one of the big boys.

Maybe someone with knowledge would know how to fake a chip upgrade that would pass inspection. I suspect that not much auditing is going on in the input side and contractors big and small are exploiting the incompetence of the govt watchdogs. If they're even there at all.

It makes you wonder how much of this sub milspec stuff is out there in critical areas.

Re:MX missile guidance systems from Radio Shack (1)

Volante3192 (953645) | more than 3 years ago | (#30230294)

Depending on what era Radio Shack those parts came from, I'd probably *prefer* the military using the Radio Shack kit.

HOW??? (5, Interesting)

frozentier (1542099) | more than 3 years ago | (#30230028)

HOW does a man and his family sell ANYTHING to the Navy? Is the Navy getting their parts from eBay or Craig's List?

Value Added Reseller (5, Informative)

pavon (30274) | more than 3 years ago | (#30230142)

Government procurement is a bureaucratic mess, and a royal pain in the ass for both buyers and sellers. Because of this (and because of rules preferring "small" and "minority-owned" businesses), it is very common for government entities to buy though a middle man that knows how their procurement systems work, rather than getting product directly from a manufacturer, especially for low-cost COTS products.

Re:HOW??? (4, Informative)

Chris Mattern (191822) | more than 3 years ago | (#30230190)

Here's how. [navy.mil] All government procurement has special programs for buying from small business, and in fact are required to spend a certain percentage at small businesses. Congress mandates it, 'cause it makes good press with the voters.

Re:HOW??? (1)

CannonballHead (842625) | more than 3 years ago | (#30230378)

with the voters.

... some voters.

Re:HOW??? (1)

NecroPuppy (222648) | more than 3 years ago | (#30230480)

The answer is pretty simple.

The Department of Defense has what is called the "DOD E-Mall".

If you're a registered vendor with it, you list your products, ARO times, costs, minimum order, etc.

Included in there is if you're a minority owned company, small business, and a couple other equal opportunity things.

Then, when a DoD user (who has taken and passed the necessary training) needs something, they can log into it, and if armed with the right search criteria (the search there is crap, unless you have a manufacturer part number), you get a list of all the vendors who have it.

Then, armed with your list of who you're allowed to buy from (not specifically excluding any vendors, just things like - haven't purchased from them more than 3 times this month), you pick one and go to whoever in your area has the authority to use the credit card, and the purchase is made. After, of course, the requisite paperwork.

It regularly works well, except for when the vendors forget to remove products they aren't carrying anymore, go out of business and forget to tell anyone, or change their ordering address / phone number.

So if this guy was in the system as having these various chips, and he was the low cost option, he'd get picked a lot. Split through a number of codes (departments) he could see some regular sales.

Why does the military buy from minor distributors? (3, Interesting)

reporter (666905) | more than 3 years ago | (#30230074)

This story is surprising. Why does the military buy critical electronic components from minor distributors?

The military spends billions of dollars and has the money to buy directly from known, reputable firms like AMD, Siemens, Mitsubishi, NEC, Toshiba, etc. Doing so would ensure the quality of the electronic components.

Why is the military dealing with relatively unknown distributors of suspicious origin? This story is fishy.

The military probably did not intend to use anything "purchased" from unknown distributors. This "purchase", from the onset, was intended to be a honey pot attracting unscrupulous businesses connected to hostile governments like Beijing. The purchased components were never intended to be used. The aim was to find such unscrupulous businesses, to determine the network that Beijing has established in the USA, and to shutdown American traitors who participate in such a network.

Re:Why does the military buy from minor distributo (1)

canajin56 (660655) | more than 3 years ago | (#30230168)

Yeah, or the minor distributors put in a lower bid. One or the other.

Re:Why does the military buy from minor distributo (1)

Dr. Eggman (932300) | more than 3 years ago | (#30230244)

For that matter, how can we even be certain they're even being used for critical applications? Maybe they had some piddling alt system or prototype to develop and they just wanted to save some money? I mean, if the other (known) purchaser of these electronics is a vacuum cleaner manufacturer, We couldn't exactly be talking high-performance electronics to start with...

...Unless the reason the vacuum cleaner manufacturer is unnamed is they were working on some sort of super powerful "Stealth" Vacuum cleaner. Or maybe an Unmanned Vacuum Cleaner (a "UVC" as it were.)

Re:Why does the military buy from minor distributo (1)

Raguleader (961891) | more than 3 years ago | (#30230424)

*ahem* The proper terminology is "Remotely Piloted Vaccuum" (RPV) ;-)

Political Correctness (0)

Anonymous Coward | more than 3 years ago | (#30230406)

Political Correctness

Military spec vs commercial (1, Interesting)

viking80 (697716) | more than 3 years ago | (#30230132)

The funny thing is that the chip manufacturers commit this same fraud daily. The same silicon is packaged in one package and labeled mil grade, and another labeled commercial grade. The price is often more than a magnitude different. Sometimes it is even the same package, just different print.

Of course sometimes there is different silicone, sometimes it is different temperature bin.

Funny that this is perfectly legal for the mfg. and when some clever reseller does the same it is fraud.

BTW. Companies with military contracts are often required to give the military "best price". With a seperate label for military version of HW, this is really profitable.

Re:Military spec vs commercial (0)

Anonymous Coward | more than 3 years ago | (#30230286)

It's not about silicon, it's about testing.

If only 1 of the 100 chips can pass 2ghz milspec, 9 more can pass 2ghz civilian, and 90 can pass 1.8ghz civilian, you package and ship accordingly.
No fraud was committed.

If I then buy a 1.8ghz civilian, and relabel it 2ghz milspec without confirming that it passes the tests, I've committed fraud.

Wait! (4, Funny)

Shrike82 (1471633) | more than 3 years ago | (#30230156)

Fuck the Navy, you mean my vacuum cleaner might have sub-standard chips in it?! THIS IS AN OUTRAGE!

Re:Wait! (5, Funny)

AioKits (1235070) | more than 3 years ago | (#30230526)

Fuck the Navy, you mean my vacuum cleaner might have sub-standard chips in it?! THIS IS AN OUTRAGE!

Are you a vacuum cleaner overclocker as well? Oh man, I thought I was the only one! I'm going to go home right this moment and make sure my Nortech N552BC-NED Dual Venturi 55G doesn't have these chips on it! And after all the time I spent adding that extra fine filtration with carbon and pin striping to it... Damnit all...

They're not just in trouble with the Navy (0)

Anonymous Coward | more than 3 years ago | (#30230180)

Something makes me think that MVP Electronics, Inc. [mvpelectronicsinc.com] and Red Hat, Inc. [redhat.com] would like to have a chat with him about trademark infringement.

since the summary was a little vague (5, Funny)

Z1NG (953122) | more than 3 years ago | (#30230182)

apparently the fake chips are made with less than 50% potato, have a weird taste and are sold in a can.

which kind? (1)

otterpopjunkie (1558913) | more than 3 years ago | (#30230186)

Do they like Vinegar and Sea Salt or plain? Seriously, the Navy could be buying computer parts with backdoors if this is what goes on.

What does counterfeit mean? (1, Interesting)

caseih (160668) | more than 3 years ago | (#30230202)

Is this like "counterfeit" copies of MS Windows? Where these chips that acted and functioned the same (shadow shift production runs)? Seems like we need a better word as counterfeit implies that it looks the same but does not act the same. Maybe we should just be saying "copies produced without authorization?"

We do that? (1)

SnarfQuest (469614) | more than 3 years ago | (#30230216)

The chips were then sold to Naval Sea Systems Command, the Washington, D.C., group responsible for maintaining the US Navy's ships and systems, as well as an unnamed vacuum-cleaner manufacturer in the Midwest.

Naval Sea Command is an unnamed vacuum cleaner manufacturer? You learn something new every day here on SlashDot.

Isn't it a bit hard to sell something without a name, though? How could you ask the salesperson for it? "I want one of those vacuums that don't have a name." "The Midwest one or the African one?" "I want blue, no yellow!"

Horrible Food (2, Funny)

murpium (1310525) | more than 3 years ago | (#30230234)

I knew those couldn't have been real Doritos

Must be one hell of a vacuum cleaner... (2, Funny)

ewhenn (647989) | more than 3 years ago | (#30230272)

because the only chips in my vacuum cleaner are doritos that fell on the floor.

Oh no... (0)

Anonymous Coward | more than 3 years ago | (#30230292)

A counterfeit jeans ring operating out of my car hole!

I wonder how many of these quasi-mil spec... (2, Interesting)

AmazingRuss (555076) | more than 3 years ago | (#30230338)

... devices found themselves in things like reactor control systems, missile systems, and other catastrophically lethal stuff?

Maybe the military should be making it's OWN components, instead of buying them from the people they have their guns pointed at.

Submarine semantics (1)

BForrester (946915) | more than 3 years ago | (#30230540)

Not what they expected when the navy asked for "sub-standard" chips

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