COMMACK, N.Y. — Aventura Technologies, based here, and seven of its current and former employees have been charged in an alleged years-long plot to illegally import and sell Chinese-made video surveillance equipment to U.S. government agencies and private customers under the guise of it being manufactured in the U.S.
Aventura Founder Jack Cabasso was among those charged by federal prosecutors in Brooklyn on Thursday. Prosecutors claim Aventura ran the alleged scheme dating back to 2006.
In addition to Aventura and Jack Cabasso, authorities said the list of defendants include Frances Cabasso, his wife and Aventura’s purported owner and CEO; senior executives Jonathan Lasker, Christine Lavonne Lazarus and Eduard Matulik; current employee Wayne Marino; and recently retired employee Alan Schwartz.
A U.S. Department of Justice press release states: “Four of the individual defendants are also charged with defrauding the U.S. government by falsely claiming that Frances Cabasso was the owner and operator of the company in order to obtain access to valuable government contracts reserved for women-owned businesses when, in fact, Aventura was actually controlled by her husband, Jack Cabasso.”
The Cabassos have also been charged with laundering the monetary proceeds of the alleged fraudulent schemes, according to the press release.
Aventura has made $88 million in sales since November 2010, according to authorities.
U.S. Attorney for the Eastern District Richard P. Donoghue said the Chinese-manufactured equipment included network surveillance cameras that were imported into the U.S. through Kennedy Airport in Queens in 1,000 shipments from China since 2010. The company spent millions of dollars for that equipment and was paid tens of millions by the U.S. government.
“As alleged, the defendants falsely claimed for years that their surveillance and security equipment was manufactured on Long Island, padding their pockets with money from lucrative contracts without regard for the risk to our country’s national security posed by secretly peddling made-in-China electronics with known cyber vulnerabilities,” Donoghue states. “With today’s arrests, the defendants’ brazen deceptions and fraud schemes have been exposed, and they will face serious consequences for slapping phony ‘Made in the U.S.A.’ labels on products that our armed forces and other sensitive government facilities depended upon.”
Six of the defendants were arrested Thursday morning and were scheduled to be arraigned later Thursday in federal court in Brooklyn, where the case was unsealed, authorities said. The government alleges charges of conspiracy to commit wire and mail fraud and money laundering.
Law enforcement also executed search warrants at the Northport home of Jack and Frances Cabasso and seized their 70-foot luxury yacht. The government also has frozen approximately $3 million in 12 financial accounts that contain proceeds from the allegedly unlawful conduct, according to authorities.
More than two dozen agents from the FBI, Customs and Border Protection, IRS and the Defense Criminal Investigative Service descended on the firm Thursday morning in an industrial neighborhood.
If convicted of the alleged crimes, the defendants each face up to 20 years’ imprisonment on each charge in the in complaint, according to authorities.
The Security Industry Association (SIA) released the following statement after this story was first published:
The Security Industry Association finds today’s charges issued by the U.S. District Court, Eastern District of New York, against Aventura Technologies and members of its management team to be very serious, and if true, would represent business practices that SIA does not condone. SIA strongly encourages its members to operate ethically and comply with all U.S. laws and regulations. SIA also continues to fully support federal government efforts to strengthen the integrity of our nation’s supply chain. The SIA Board of Directors has begun to review these charges and the status of Aventura’s membership in SIA.
SIA represents more than 1,000 security solutions providers, ranging from large global technology firms to locally owned and operated small businesses. Our membership includes manufacturers, software developers, and systems integrators that install and maintain security technology for end-users in both the government and commercial sectors. SIA members supply security practitioners with robust security solutions that protect people, sensitive data and networks, physical structures, proprietary information, and vital U.S. national security interests.
