What happens when a company sends a customer a photograph of its “American factory” and the photo is actually of a supplier’s facility in China? What about when it has foreign manufacturers print “Made in the USA” labels on products before they even leave the country? Or when it uploads a branch of the US military’s logo onto foreign-made body camera firmware to make the product look domestic?
If those sound like hypotheticals, they are not. They are among the findings in United States v. Cabasso where the US District Court for the Eastern District of New York denied defendant Jack Cabasso’s motion to withdraw his guilty plea to conspiracy to commit mail and wire fraud under 18 U.S.C. § 1349. The case arose from Cabasso’s operation of Aventura Technologies, Inc., a Long Island, New York, company that sold approximately $88 million in security equipment, including networked cameras, body cameras, and turnstiles, to US government agencies, foreign governments, and private-sector customers. Aventura marketed itself as a “true ‘single-source’ manufacturer” that “proudly manufacture[d] in the U.S.A.”
It did not.
The Scheme
We have previously discussed how even well-intentioned origin claims can draw regulatory scrutiny and unpacked the growing federal focus on “Made in USA” enforcement. Cabasso takes that enforcement posture to its logical extreme. Aventura’s products were, in large part, imported from the People’s Republic of China (PRC). But the deception went far beyond mislabeling. According to the court’s opinion, Cabasso and his employees engaged in an elaborate, years-long effort to disguise the Chinese origin of Aventura’s products.
PRC manufacturers printed “Made in the USA” labels and American flag logos directly onto Aventura-branded products before shipping them to the United States.
Cabasso directed employees to scrub Chinese manufacturers’ initials from circuit boards and review firmware code for Chinese characters that could reveal the products’ true origin.
When a Kuwaiti government contractor asked whether cameras were made at Aventura’s factory, Cabasso responded “yes” and attached a photograph of Aventura’s purported manufacturing facility. The photo was actually of a supplier’s factory in China.
A Swedish reseller complained that a camera shipped with no trace of Aventura and appeared to be an identical Chinese product. Cabasso directed an employee to lie, claiming the units were “R&D units” mixed up on the production line.
Cabasso sold PRC-made body cameras to the US Air Force under a Buy American contract, going so far as to have the PRC manufacturer upload the Air Force logo onto the cameras’ firmware. The cameras were later found to also contain logos of PRC police entities.
When US Department of Energy (DOE) turnstiles shipped from China arrived at Oak Ridge National Laboratory with Chinese-language stickers, Cabasso directed an employee to falsely tell the DOE that the markings related to acrylic that Aventura “cuts, mounts and polishes” in New York. He later admitted that the entire item was made in China.
Read the article.