The dust has settled from the US government’s prosecution of VisionTech for selling counterfeit electronics, but the ramifications of the crime will continue to reverberate through the supply chain for quite a while.
In 2010 the government charged Shannon Wren, VisionTech's owner, and Stephanie McCloskey, an employee, with selling more than $15 million worth of counterfeits over five years. McCloskey pleaded guilty and was sentenced to 38 months in prison. Wren died before he could be sentenced.
Although the company has been shut down, many of the components it sold are still out there somewhere. The McCloskey sentencing memo notes that VisionTech sold parts to 1,101 separate buyers. “Sales by VisionTech were to virtually every industry sector and to numerous chip distributors,” according to the memo.
Included with the memo are two lists of VisionTech customers -- one of US buyers and one of international buyers. Among the more familiar names on the US buyer list are GE Healthcare, Hughes Electronics, Jabil Global Services, L3 Communications, and Micron Corp. Even if you did not buy from VisionTech, your supplier or the supplier of your supplier may have.
“A downstream buyer would not likely know that parts it acquired or systems it acquired from an intermediary source contained counterfeit devices that were imported and sold by VisionTech,” said the memo.
“The chance that you had somebody on your approved supplier list that did buy from VisionTech is probably 100 percent,” according to Fred Schipp, an electrical engineer within the Missile Defense Agency (MDA) Quality and Safety Organization’s Part and Materials Advisory Group, who spoke on a panel at a conference on counterfeit electronics this summer. (The MDA was one of the government agencies found by the Senate Armed Service investigation to have included counterfeit components in a missile system. In this case, it was counterfeit memory chips in computers for Terminal High Altitude Area Defense missiles.)
The list of domestic VisionTech customers includes 84 percent of members of the Independent Distributors of Electronics Association (IDEA) and 44 percent of the members of ERAI, says Schipp. MDA has issued an advisory to determine potential usage of VisionTech parts either directly or indirectly by its suppliers. Small suppliers, in particular, still don’t believe they could possibly get a counterfeit or that if they do it would be easily detected and replaced. Some 42 percent of MDA contractors are Tier 4 or lower suppliers, notes Schipp.
In the memo, the government admits that “there is no way to know where those [VisionTech parts] have ended up.” It goes on to describe a disturbing photo found during the investigation of a young boy, believed to be Wren’s son, seated at a work table equipped with tools for “refurbishing,” including a toothbrush, an eraser, and Armor All (presumably to make the parts look clean and shiny).
“One must wonder which defense contractor, medical device manufacturer or other manufacturing sector received from VisionTech counterfeit integrated circuits ‘refurbed’ by a child,” the memo cautions.