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Man Pleads Guilty Selling Fake Chips to Navy

One has to wonder about a man who thinks he can get away with selling thousands of counterfeit chips to the U.S. Navy. Apparently, 32-year-old Neil Felahy of Newport Coast, California had that kind of mentality, and has now pleaded guilty to conspiracy and counterfeit-goods trafficking. The alleged chip-counterfeiting scam took place between 2007 and 2009, and included Felahy's wife and her brother.

According to this press release from the U.S. Department of Justice, the trio sanded off the brand markings of cheap chips and melted the plastic casings with acid to make them appear like rival brands or better models of the original brand. The group also used counterfeit chips as well, and applied the same process to make them appear as high-quality chips.

The Department of Justice said that the trio performed the operation under various names including MVP Micro, Red Hat Distributors, Force-One Electronics and Pentagon Components. The trio also racked in big bucks, importing more than 13,000 counterfeit chips worth more than $140,000 USD. Their portfolio of counterfeited chips included fake versions of Intel, Fujitsu, Analog Devices, VIA, and National Semiconductor.

Apparently, the operation was discovered via the U.S. Navy: the trio sold the fake chips to the Naval Sea Systems Command, the group responsible for maintaining the U.S. Navy's ships and systems. Felahy now faces up to 51 months in prison and fines totaling in the millions. He entered his guilty plea on the condition that the charges would be dropped against his wife.

Meh, we hate generic chips... unless they're on sale, that is.

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