WASHINGTON, D.C.—OCTOBER 25, 2011—The Semiconductor Industry Association (SIA), representing U.S. leadership in semiconductor manufacturing and design, today applauded the U.S. Federal Court’s strict sentencing in the first federal prosecution of a case involving trafficking of counterfeit integrated circuits (I/Cs). 

From 2006 and 2010, VisionTech Components knowingly sold counterfeit I/Cs to approximately 1,101 buyers in the United States and abroad, including counterfeit I/Cs destined for military applications. For her part in the scheme, VisionTech Component’s administrator, Stephanie McCloskey, was sentenced to 38 months imprisonment and $166,141 in fines.

“The VisionTech case has exposed a truly dangerous type of fraud that our country is facing, and our industry is grateful to the investigators and prosecutors that have contributed to today’s outcome,” said Brian Toohey, president, Semiconductor Industry Association.  “From automotive and medical to military and public safety applications; semiconductors form the foundation to our citizen’s most critical tools in use every day. If these devices are not reliable, safe and effective due to counterfeit parts, lives are put at risk, which is why it is absolutely imperative that people that violate this trust are brought to justice.”

VisionTech Components, headquartered in Clearwater, Florida, created a website purportedly selling name brand integrated circuits, which were primarily acquired from sources in China bearing counterfeit marks and imported into the United States for sale to the public. VisonTech knowingly sold counterfeit I/Cs to defense contractors and other manufacturers of critical systems such as brakes for high speed trains and instruments for firefighters to detect nuclear radiation.  VisionTech and its directors had reportedly generated more than $15.8 million in gross receipts through the sale of inexpensive, counterfeit I/C’s falsely marked as military, commercial or industrial grade and often sold at more than 100 to 1000 times their real value. 

“Semiconductor companies design and manufacture integrated circuits to the highest quality and reliability levels.  However, counterfeit components, such as those sold by VisionTech, have notoriously poor reliability which may be difficult to detect until it is too late.  Such counterfeits may pass initial testing but later fail catastrophically in critical applications due to the methods counterfeiters use to recondition products,” said Andrew Olney, director of Reliability and Product Analysis, Analog Devices, Inc. and Chairman of SIA’s Anti-counterfeiting Task Force.  “The SIA Anti-counterfeiting Task Force applauds the U.S. government’s focus on identifying and prosecuting individuals involved in the sale of these illegal, inferior components.”

Prosecution of the VisionTech case and sentencing would not have be possible without the tremendous efforts by the United States Attorney’s Office for the District of Columbia as well as the Department of Justice Task Force on Intellectual Property (IP Task Force), The U.S. Immigration and Customs Enforcement (ICE), and the Naval Criminal Investigative Service (NCIS).