A few weeks ago I shared my takeaways from attending the MIT Forum for Supply Chain Innovation Fall conference that focused on the current widespread problem of bogus and counterfeit materials infiltrating multitudes of supply chains. The conference speakers reinforced how widespread this problem has become, not only in commercially-oriented, but even defense-oriented supply chains. Scrupulous players have found that there are more monetary and other incentives for engaging in counterfeit part activity suppliers and other players have discovered more sophisticated means to alter the composition or stated quality of parts, more often beyond current means to detect such deficiencies.
The latest evidence of the extent of the problem and how strident government monitoring and enforcement will become was highlighted in a recent Electronic News story. A California man, one of three family members that were indicted by the United States Attorney’s Office for trafficking counterfeit electronic components, has pleaded guilty to two separate counts involving conspiracy to defraud the United States and trafficking in counterfeit goods. This individual now faces five to ten years of incarceration and fines ranging in excess of $2 million dollars, but has agreed to cooperate with the government to uncover others.
Reading this article will give you a sense of how the counterfeiting process was allegedly conducted, and how these defendants on 22 occasions imported over 13 thousand integrated circuit assemblies bearing counterfeit trademarks, including military-grade markings involving contracts to supply the U.S. Navy and other government agencies. The counterfeited parts involved altering the trademarks of seven different semiconductor companies.
While the Acting U.S. Attorney issues a very stern warning regarding how serious stepped-up enforcement will become, we have to wonder how many of these counterfeit parts are currently still populating our most sensitive supply chains and supply depots.