Semiconductor Counterfeiter Sentenced to 46 Months in Prison

Wednesday, Jun 05, 2019, 11:00am

by Semiconductor Industry Association

Most Americans have encountered counterfeit wristwatches or handbags, but many are unaware of the threat posed by counterfeiters of a product at the heart of modern technology: semiconductors.

A reminder of the dangers of counterfeit semiconductors occurred on May 30, when Rogelio Vasquez was sentenced to 46 months in prison after pleading guilty to selling counterfeit semiconductors he believed were destined for use by the U.S. military. If these counterfeits had been installed and failed in these critical military applications, including a B-1 Lancer Bomber and a classified weapon system used by the U.S. Air Force, the consequences could have been disastrous.

Typically, counterfeiters from around the world – most commonly China – alter old chips taken from recycled electronics to make the chips appear new, then sell them to distributors like Vasquez’s California-based PRB Logics Corporation. The counterfeits then make their way into products throughout society.

Counterfeit semiconductor traffickers often target defense contractors that make systems that are critical to U.S. national security. The defense industrial base is such a critical market for these traffickers because defense companies often have to use legacy/outdated equipment due to Department of Defense rules, and they are typically willing to pay a significant price for these products.

While changes to federal procurement rules have helped reduce the amount of counterfeits entering the defense supply chain, the Vasquez case shows that existing reforms are not enough. To protect the warfighter from the dangers of a counterfeit chip in a critical weapons system, the Department of Defense needs to buy from authorized distributors whenever possible. But even that is not enough. Customs and Border Protection needs to step up targeted seizure of counterfeit chips at the border. Without seizures at the border, counterfeit chips will be able to enter the U.S. and enter the defense industrial supply base.

For more on this issue, download the SIA white paper: “Winning the Battle Against Counterfeit Semiconductor Products