Six founders and senior officials of the Aventura company were arrested and charged with fraud on Thursday after a Chinese-made camera was found in a US airbase, as reported by arstechnica.
In a criminal complaint, which was unsealed Thursday, federal agents claim that New-York based Aventura was re-selling Chinese-made technology for over a decade.
The complaint claims that senior executives at Aventura, including managing director and de facto owner Jack Cabasso, were aware of the fraudulent imports.
In 2016, in an attempt to conceal his own false sales, Cabasso sent an email to a government official accusing 12 of his competitors for violating federal law by selling Chinese-made products to the government.
Federal investigators discovered the camera as it arrived in JFK airport from China. The same camera was sent to a naval base in Connecticut two weeks later.
According to federal police, Aventura has racked up $88 million in revenue over the last 10 years, including federal contracts.
"Aventura's largest customers are US government agencies, including the US Army, US Navy, and US Air Force," prosecutors report.
Chinese-made tech ended up in the possession of military facilities such as the US Air Force and the Navy. The Navy was also found to have ordered a $13,500 night vision camera from Aventura.
In August 2018, an Air Force service member noticed something strange about a body camera worn by security guards at an Air Force base.
Investigators observed the logos in the camera's firmware: namely an Air Force Logo, the logo of the Chinese company that made the camera, and the logo of China's ministry of public security.
Forensic analysis discovered that all three images were uploaded to the camera at the same time in the Chinese time zone, suggesting that the camera was not just made in China, but the Chinese were aware that the body camera would end up in an Air Force facility.
A federal law called the "Trade Agreements Act" legally prohibits federal agencies from purchasing products made in certain countries, such as China.
The law also demands that companies disclose the manufacturing origins of products, especially when federal agencies are the recipient.
The news comes amid an ongoing trade war between the US and China, with the Trump administration accusing Chinese companies with connections to the ruling Chinese Communist Party of being a threat to national security and placing certain Chinese companies, such as Huawei, on a trade blacklist.