back to article Chinese con-artists cop to US military counterfeit chip switch caper

Chinese national Daofu Zhang has pleaded guilty to conspiring to buy top-end field-programmable gate arrays (FPGAs) stolen from a US Navy base and replacing the swiped silicon with counterfeit duds. Last Friday, in Connecticut's New Haven federal court, Zhang, 40, admitted offering to purchase military-spec chips from a US …

  1. Herby

    Alternative...

    Just turn the "counterfeit duds" back to them, and pocket the $$$

    It isn't like they should be able to tell the difference if they are good "look alike".

    I don't know how happy the buyers would be, but it isn't like they could take me to court. Unfortunately they might resort to the same "court" as drug dealers use when ti comes to being "ripped off" (2nd amendment and all that).

    Probably not a safe business to get into. I'll need to re-think the career path.

    1. DropBear

      Re: Alternative...

      1) No matter how closely they match the look, I'm pretty sure the one who forged the counterfeit can always tell where the difference is

      2) It's quite trivial to shove any of the chips into an appropriate test socket and do a JTAG boundary scan or similar - I really doubt these were any kind of "half-functioning" rather than "dead plastic with pins" sort of duds...

  2. Youngone Silver badge
    Black Helicopters

    Follow the Money

    Who were these guys ultimately working for? My bet would be the Chinese government in one form or another.

    I'm sure the US has thought of that, and I'm sure they won't blurt it out like I just did.

    Probably a quiet word in a diplomatic ear.

    1. thames

      Re: Follow the Money

      They're probably working for themselves, as dealers in counterfeit and stolen goods. This is the same country where businessmen sell baby formula diluted with melamine (powder used to make plastics) because it boosts the results of protein tests which in turn lets them use less actual milk powder.

      The story said the Americans were already investigating the company for selling "bogus semiconductors". A lot of this stuff is "real" in the sense that the chips came off genuine assembly lines. In may cases the "fakes" are simply genuine chips that have been relabelled as being higher spec, more expensive versions, or are recycled chips resold as new. In this particular case, it looks like the Americans approached the company and offered to sell them stolen goods. The businessmen took the bait and got nicked. The investigators just had to make the bait tasty enough to lure the businessmen into coming to the US so they would come under US jurisdiction (yeah!, America world police!). A lot of drug and normal stolen good investigations work this way. In this case, by offering goods which are under export restriction, the investigators can ratchet up the penalties beyond just receiving stolen goods.

      Lots of E-bay style bargain electronics is "fake", or made with "fake" chips. The sellers just count on purchasing departments buying whatever is cheapest. Once that seller gets too much of a reputation for selling dud goods, he just folds up shop and re-opens under a new name.

      It's not just Nike and other crap tat consumer brands who complain to their government about counterfeiting. The US government said they were going to try to shut down the dodgiest sellers to at least take some of the worst ones out of circulation. I suspect this is at the root of what this case was all about.

      1. Mark 85 Silver badge

        @thames -- Re: Follow the Money

        Very true indeed. The other "catch" is that China has no international respect for patents, trademarks, or copyright. Unless the "invention" is patented in China by a native Chinese, it won't be recognized. This is, perhaps, just another way for them to get product without actually doing any design or engineering.

        1. mhenriday
          Boffin

          Re: @thames -- Follow the Money

          «The other "catch" is that China has no international respect for patents, trademarks, or copyright. Unless the "invention" is patented in China by a native Chinese, it won't be recognized.» Interesting, «Mark 85» ; the relevant IP information from the UK Intellectual Property Office would seem to disagree. But no doubt you know more about the matter - and have greater experience of China - than the authors of this brochure....

          Henri

          1. Yet Another Anonymous coward Silver badge

            Re: @thames -- Follow the Money

            Yes because you would expect a UK government report to say "china has signed all these international agreements, but don't expect the government on the ground to take any notice of your claims - especially when the company ripping you off is state owned"

          2. Mark 85 Silver badge

            Re: @thames -- Follow the Money

            Having been though this, I trust real world experience and the word of other who have been through it more than I trust some brochure. Waving that around at the Chinese won't get you very far. Come to think of it.. even lawsuits don't get you very far over there.

        2. John Brown (no body) Silver badge
          Joke

          Re: @thames -- Follow the Money

          "The other "catch" is that China has no international respect for patents, trademarks, or copyright. Unless the "invention" is patented in China by a native Chinese, it won't be recognized. "

          In some respects they are still an "emerging nation", so are using the same techniques the US used, ie ignore all foreign patents, IP etc .

          (Only half joking)

      2. Peter Simpson 1
        FAIL

        Re: Follow the Money

        CSB time:

        A company I worked for, back in the 90s, bought some hard-to-find chips at an obscene price from a used parts broker (you know, those guys that come up first in a Google search for obsolete parts)

        They installed them in the boards, no surprise, they all failed test. Come to find out, some bright light in purchasing couldn't find the parts in distributor stock, so he decided to show some initiative and used a parts broker. Last time we ever did THAT.

        Another favourite trick of these guys, is to buy "failed test" ICs from salvage companies (or steal them from the manufacturer while they're not looking) -- these are parts off the chip manufacturer's assembly line that got packaged, but for some reason failed testing. They are then sold by parts brokers as the genuine item.

        Several years back, I bought some RAM DIMMs from a well-known vendor. They were made by a company I'd not heard of before. They all worked fine, but all failed within 6 months -- too late for any warranty claims. I have to admire the skill of the manufacturer -- timing is everything.

    2. Anonymous Coward
      Anonymous Coward

      Re: Follow the Money

      Most likely chinese goverment.

      They'll receive the death penalty for getting caught.

  3. Destroy All Monsters Silver badge
    Paris Hilton

    How is that working?

    Are the "duds" (I would think they will at least pass initial simple tests?) supposed to have the same serial numbers as the originals? Are they produced on request?

    1. Version 1.0 Silver badge

      Re: How is that working?

      Chances are they wanted the Mil Spec version versus Commercial grade- Mil Spec is supposed to be 100% tested to operate at a much larger temperature range than commercial grade. That tends to mean that they are simply very high quality chips and simply work better.

      I don't know how it is these days but back in the 70's you could fix a lot of intermittent, hard to fault find problems with Z80 based hardware by swapping out the commercial grade chip for a Mil Spec grade chip. They were much more tolerant of a marginal clock signal than the commercial grade chips, particularly at high temperatures.

      1. Cynic_999 Silver badge

        Re: How is that working?

        "

        Chances are they wanted the Mil Spec version versus Commercial grade- Mil Spec is supposed to be 100% tested to operate at a much larger temperature range than commercial grade. That tends to mean that they are simply very high quality chips and simply work better.

        "

        Radiation hardened chips are usually made by a slightly different process that uses an insulating layer under the wafer substrate (e.g. sapphire). The bigger question is what end-user would be willing to pay $37K plus mark-up for such a feature. The temperature range could be achieved by providing a suitable temperature-controlled environment for the chip at a fraction the cost, so it is probably the radiation proofing that was needed.

  4. Dabooka Silver badge

    Didn't this use to happen years ago?

    I'm sure back in the days of 486 processors, unscruplous types used to skim the top off 25mhz SX2s and relabel them as 33mhz DX2s etc?

    Seems a bit bonkers now, but it must've been worthwhile back then.

    Edit

    A quick Google found this .pdf from 1995

    1. Anonymous Coward
      Anonymous Coward

      Re: Didn't this use to happen years ago?

      There was this IEEE Spectrum article a while back (2013) and it seems to be getting worse.

      The Hidden Dangers of Chop-Shop Electronics

      Xilinx, based in San Jose, Calif., is a highly respected manufacturer of FPGAs, and Boeing bought the ice-detection module containing the suspect part from BAE Systems, a reputable British defense company. The trouble occurred somewhere in the supply chain upstream from BAE, which wound through companies in California, Florida, Japan, and China. However, retracing that FPGA’s path led not to Xilinx but to a Chinese company called A Access Electronics. It apparently had turned a quick profit by selling used Xilinx parts as new. BAE ended up purchasing about 300 suspect FPGAs, many of them untested. Fortunately, most had not yet been installed on planes.

      To a suspicious buyer, a number of clues might have suggested that the parts were not brand new. For example, parts stamped with the same manufacturing lot code had different ceramic package shapes and four different date codes. Some of the pins were shorter than the length specified in the manufacturer’s data sheet. Some packages themselves were chipped. But somewhere along the supply chain, someone accepted used parts as new, and they ended up on U.S. Navy airplanes.

      1. Yet Another Anonymous coward Silver badge

        Re: Didn't this use to happen years ago?

        I just had to throw away a bunch of front panels for a switch unit to be used in a doctors office where a patient's hand might come into "intermittent accidental contact" - because the factory couldn't trace the batch of anodize that was used to make it silver.

        And yet BAE are allowed to just buy FPGAs on fsckin ebay to sue in a fscking plane !!!!

  5. MT Field

    Yes they could substitute re-labelled and cheaper commercial parts for the ml-spec ones. Chances are they were bought for spares inventory and the US Navy would never get around to using them, and even then maybe never noticing.

    1. Cynic_999 Silver badge

      "

      Yes they could substitute re-labelled and cheaper commercial parts for the ml-spec ones.

      "

      Probably a bit more to it than simple re-labelling. The commercial chips are sold in the usual plastic packaging. Military grade chips are IME usually supplied in a fairly distinctive ceramic package.

  6. Cynic_999 Silver badge

    This is not a normal theft. The article states that the criminals were willing to pay $37000 a piece for the chips. They could have legally bought commercial grade chips with the same functionality for a fraction the price - in fact they could have bought chips in wafers, screened for temperature range and custom packaged for that price, though in that case it could not have been kept secret.

    This obviously indicates that the military specification was what was important rather than only the functionality. This is not a factor that is at all important in most applications, so it begs the question as to what the intended application could have been in order to justify the extremely high price they were willing to pay for the rating. The only end-user I can think of that would require a military-spec component is a government or nuclear power facility that is banned from sourcing the components legitimately.

    Perhaps the company that is going to be making our next nuclear power stations is beginning their procurement process?

    1. Anonymous Coward
      Anonymous Coward

      You just need a legit buyer, a shady seller with "a well-filledl rolodex" making low-price promises to source stuff and the in-betweener on the buyer's side either not very bright or open to carrot persuasion.

      A William Gibsonesque deal will unfold.

      There was nothing in Number 92 but a standard Hitachi pocket computer and a small white styrofoam cooler chest. The cooler contained the remains of three ten-kilo slabs of dry ice, carefully wrapped in paper to delay evaporation, and a spun aluminum lab flask. Crouching on the brown temperfoam slab that was both floor and bed, Case took Shin's .22 from his pocket and put it on top of the cooler. Then he took off his jacket. The coffin's terminal was molded into one concave wall, opposite a panel listing house rules in seven languages. Case took the pink handset from its cradle and punched a Hongkong number from memory. He let it ring five times, then hung up. His buyer for the three megabytes of hot RAM in the Hitachia tray of unused radiation-hardened Xilinx FPGAs wasn't taking calls.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Biting the hand that feeds IT © 1998–2021