New York company accused of selling Chinese-made security equipment to U.S. military

7 charged in illegal sale of surveillance equipment

New York — A Long Island, New York, company is accused of illegally importing Chinese-made security equipment and then selling it to U.S. agencies. Federal agents swarmed the facility Thursday morning. Now seven current and former employees are facing charges.

According to the criminal complaint, since 2006, Aventura Technologies operated a scheme where over 1,000 shipments of network security software and hardware from China were relabeled as American and then sold to the federal government. That includes surveillance systems bought by the U.S. Army, Air Force, Department of Energy and other U.S. agencies. The company allegedly made nearly $90 million.

U.S. Attorney Richard Donoghue called the fraud scheme a national security threat.

"Aventura not only defrauded its customers, but also exposed them to serious known cyber-security risks, and created a channel by which foreign adversaries and other actors could potentially access some of our governments' most sensitive facilities and computer networks," Donoghue said.

Hours after the raid, some of the seven people charged could be seen leaving the courthouse. They all face charges of wire and mail fraud.

The arrests come at a time when the U.S. government is concerned about electronics from China. This summer, imports from two of the biggest Chinese tech equipment makers Huawei and ZTE were banned.

Aventura Technologies owner Jack Cabasso and his wife Frances face an additional fraud charge. Federal prosecutors said the couple misrepresented the company as a female-owned business in order to gain more favorable government contracts.