Owner of Costa Mesa company sentenced to prison for selling counterfeit electronic parts

The owner of a Costa Mesa electronics distributor was sentenced to nearly four years in federal prison for selling counterfeit integrated circuits, some of which ended up in a military weapon system, federal prosecutors said.

Rogelio Vasquez, 44, of Orange was sentenced last week in U.S. District Court to 46 months and ordered to pay $144,000 in restitution, prosecutors said.

Vasquez pleaded guilty to one felony count of wire fraud, two counts of trafficking in counterfeit goods and one count of trafficking in counterfeit military goods.

Vasquez was the owner of Costa Mesa-based PRB Logics Corp., which described itself on its former website as a “distributor of obsolete electronic components.”

Vasquez admitted to trafficking more than 9,000 integrated circuits with a total value of $894,218 between July 2009 and May 2016, prosecutors said.

Over seven years, Vasquez bought from Chinese suppliers old, used and previously discarded integrated circuits that had been refurbished and marked with counterfeit logos, prosecutors said.

Vasquez admitted that he knew the circuits had been though a process known as “blacktopping,” in which existing markings on old, used or discarded components are sanded off and re-marked, prosecutors said. The devices were painted and outfitted with altered date and lot codes and countries of origin and sold as new, prosecutors said.

Vasquez admitted that he instructed his suppliers to re-mark the circuits and instructed a Chinese testing laboratory to provide two reports on his components — one accurate and one “sanitized” that excluded any results that indicated the components were used, re-marked or in poor condition, prosecutors said.

According to court documents, Vasquez sold the counterfeit electronics as new parts made by manufacturers such as Xilinx, Analog Devices and Intel.

In 2012, Vasquez acquired and sold counterfeit circuits from China and sold components to a U.S. defense subcontractor that later ended up in a classified Air Force weapon system, prosecutors said.

“Simply put, the scheme was endangering lives for the sake of illicit profit,” U.S. District Judge Josephine Stanton said Thursday.

Beginning in November 2015, Vasquez, using the alias James Harrison, began selling counterfeit components to an undercover federal agent. Over seven months, he sold 106 counterfeit integrated circuits, including a lot of eight circuits that he believed would be used by the U.S. military in a B-1 Lancer bomber aircraft, Vasquez admitted in a plea agreement filed in court Dec. 29.

“Mr. Vasquez has accepted responsibility for his conduct and made significant attempts to mitigate his conduct,” Vasquez’s attorney, Kate Corrigan, said in a statement Monday.

Vasquez helped the government determine where the integrated circuits went into the military supply chain, which helped mitigate safety issues as well as the U.S. Defense Department’s costs associated with investigating the counterfeit components, Corrigan said.

The investigation into Vasquez and PRB Logics was conducted by the Defense Department, Defense Criminal Investigative Service, Immigration and Customs Enforcement’s Homeland Security Investigations, and National Reconnaissance Office.

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UPDATES:

This article was originally published at 7:50 a.m. and was later updated with additional comments and information.