A company sold Chinese-made surveillance equipment to the US with ‘Made in the USA’ labels, feds allege

A New York-based technology company sold Chinese-made surveillance equipment to the US government while falsely claiming the products were made in the United States — a scheme that directly undermined national security, federal prosecutors have alleged.

Aventura Technologies, based in the Long Island town of Commack, for years sold surveillance cameras and other equipment used on US military installations, prosecutors alleged in a criminal complaint unsealed Thursday in federal court. Its clients included private sector companies

Aventura — unbeknownst to the US government — imported millions of dollars worth of equipment from China that was labeled and “passed off … as American made,” Richard P. Donoghue, US attorney for the Eastern District of New York, said Thursday.

Aventura claimed it made the equipment, the complaint says. It adds the company was paid $88 million since November 2010.

“Because of misrepresentations made to the US government, Aventura was paid tens of millions of dollars for Chinese manufactured surveillance systems that ended up on Army and Air Force bases, in Department of Energy facilities, on Navy installations and even on US aircraft carriers,” Donoghue said.

He added that the alleged scheme had been going on for more than 13 years and “the owners and operators of Aventura grew rich trading our national security for personal profit.”

Seven employees or former employees have been charged with conspiracy to commit fraud, unlawful importation and money laundering. They include Jack Cabasso, the company’s founder and managing director.

CNN has reached out to Aventura and the arrested employees for statements. Some of them have declined to comment while others didn’t immediately respond.

Cybersecurity risk

Court documents say the fraud resulted in a serious cyber security risk since the software deployed into US systems was known to have vulnerabilities and could potentially allow hackers to access these networks and obtain sensitive data.

“Obviously when you have Chinese-made cameras with (Chinese) software loaded into them networked into sensitive installations such as Army bases, Navy bases, Department of Energy facilities, and even American aircraft carriers, that causes great concern for our national security,” Donoghue said.

“Had we known that this was Chinese software, we may have been able to take steps to patch it and address that risk but because this was masked and we did not know this was Chinese software, in many instances those steps were not taken,” he added.

He said there “are no allegations in the complaint about the Chinese government itself and we’re not making any today.”

Fraud and money laundering scheme

The tech company also portrayed itself to the US government as a female-owned small business in order to obtain contracts set aside for such businesses, prosecutors said.

Jack Cabasso’s wife, Frances Cabasso, is listed on nearly all relevant paperwork as the CEO and majority owner of Aventura. But court documents say she plays virtually no role in the operation of the business, and that in reality it is controlled by her husband. She was among the seven charged.

Aventura was also involved in a money-laundering scheme, according to court documents. The government’s investigation revealed the Cabassos transferred money to shell companies, which in turn made numerous payments to benefit themselves and their relatives.

Aventura describes itself on its website as an “innovative designer, developer and manufacturer of security hardware, software and peripheral products for government, military and enterprise since 1999.”