Counterfeit Parts - Neil Felahy Sentenced to 20 Months in Prison

Marc

Fully vaccinated are you?
Leader
Operations Manager for MVP Micro Sentenced to 20 Months in Prison For Conspiring to Sell Counterfeit Microelectronics to the U.S. Military
- Company’s Owner Was Sentenced to Prison Last Week.

Neil Felahy, Operations Manager for MVP Micro, was sentenced today by U.S. District Judge Emmet Sullivan as follows: 20 months incarceration, 3 years of supervised release, restitution of $184,612.57 (joint and several liability with Mustafa Aljaff), and 500 hours of community service.

Neil Felahy, 34, the operations manager for MVP Micro, a California-based company, was sentenced today to 20 months in prison for conspiring to sell counterfeit integrated circuits to the United States military, defense contractors, and others.

Felahy, of Newport Coast, California, pled guilty in November 2009 to federal charges of conspiracy to distribute counterfeit integrated circuits and to commit mail fraud, and trafficking in counterfeit goods. He was sentenced in the U.S. District Court for the District of Columbia by the Honorable Emmet G. Sullivan. Upon completion of his prison term, Felahy will be placed on three years of supervised release. He also must perform 500 hours of community service.

The sentence was announced by U.S. Attorney Ronald C. Machen Jr.; John P. Torres, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Field Office in Washington, D.C., and John F. Wagner, Special Agent in Charge of the Washington, D.C. office of the Naval Criminal Investigative Service (NCIS).

Co-defendant, Mustafa Abdul Aljaff, 32, also of Newport Coast, California, who is Aljaff’s brother-in-law, was sentenced on February 15, 2012 to 30 months in prison. Upon completion of his prison term, Aljaff will be placed on three years of supervised release. He also must perform 250 hours of community service. Both Felahy and Aljaff pled guilty within months of their arrests and cooperated with authorities as the investigation continued.

As part of the plea agreement, Felahy agreed to pay, jointly and severally with Aljaff, $184,612 in restitution to the semiconductor companies whose trademarks were infringed as a result of their criminal acts.

Aljaff owned MVP Micro and a host of other companies operating from the same location in Irvine, California. According to the government’s evidence, he was the mastermind and leader of the highly sophisticated fraud scheme to import, sell, manufacture and distribute, in interstate and international commerce, counterfeit integrated circuits. The conspiracy took place between September 2007 and August 2009. As the operations manager for MVP Micro, Felahy ran the day-to-day operations that enabled the conspiracy.
 

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Wes Bucey

Prophet of Profit
Operations Manager for MVP Micro Sentenced to 20 Months in Prison For Conspiring to Sell Counterfeit Microelectronics to the U.S. Military
- Company’s Owner Was Sentenced to Prison Last Week.

Neil Felahy, Operations Manager for MVP Micro, was sentenced today by U.S. District Judge Emmet Sullivan as follows: 20 months incarceration, 3 years of supervised release, restitution of $184,612.57 (joint and several liability with Mustafa Aljaff), and 500 hours of community service.

Neil Felahy, 34, the operations manager for MVP Micro, a California-based company, was sentenced today to 20 months in prison for conspiring to sell counterfeit integrated circuits to the United States military, defense contractors, and others.

Felahy, of Newport Coast, California, pled guilty in November 2009 to federal charges of conspiracy to distribute counterfeit integrated circuits and to commit mail fraud, and trafficking in counterfeit goods. He was sentenced in the U.S. District Court for the District of Columbia by the Honorable Emmet G. Sullivan. Upon completion of his prison term, Felahy will be placed on three years of supervised release. He also must perform 500 hours of community service.

The sentence was announced by U.S. Attorney Ronald C. Machen Jr.; John P. Torres, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Field Office in Washington, D.C., and John F. Wagner, Special Agent in Charge of the Washington, D.C. office of the Naval Criminal Investigative Service (NCIS).

Co-defendant, Mustafa Abdul Aljaff, 32, also of Newport Coast, California, who is Aljaff’s brother-in-law, was sentenced on February 15, 2012 to 30 months in prison. Upon completion of his prison term, Aljaff will be placed on three years of supervised release. He also must perform 250 hours of community service. Both Felahy and Aljaff pled guilty within months of their arrests and cooperated with authorities as the investigation continued.

As part of the plea agreement, Felahy agreed to pay, jointly and severally with Aljaff, $184,612 in restitution to the semiconductor companies whose trademarks were infringed as a result of their criminal acts.

Aljaff owned MVP Micro and a host of other companies operating from the same location in Irvine, California. According to the government’s evidence, he was the mastermind and leader of the highly sophisticated fraud scheme to import, sell, manufacture and distribute, in interstate and international commerce, counterfeit integrated circuits. The conspiracy took place between September 2007 and August 2009. As the operations manager for MVP Micro, Felahy ran the day-to-day operations that enabled the conspiracy.
Seems like a confusing typo in the article (Co-defendant, Mustafa Abdul Aljaff, 32, also of Newport Coast, California, who is Aljaff’s brother-in-law,) They probably mean Aljaff and Felahy were brothers-in-law, not that Aljaff was his own brother-in-law.

Comment:
I wonder if this case would have been prosecuted if the U.S. government had not been the receiver of the counterfeit items? The concept of using counterfeits is rampant from auto and appliance repair to OEM. Sometimes it is just mislabeling steel grades or heat treatments. Other times it is mislabeling country of origin. In the recent past, there have been instances where radioactive scrap metals have been smelted and supplied as part of raw material ingots, bar, plate, and sheet stock to unsuspecting OEM. Prosecutions for such don't seem to hit the news like cases where the US government is the receiver.
 

Marc

Fully vaccinated are you?
Leader
<snip> just the tip of what appears to be a very large problem... <snip>
I can't honestly say how bad counterfeiting is. There are so many things counterfeited these days including drugs. It takes some $$$ to set up some of these electronics operations. I guess it does for drugs and things as well. It's hard to really get decent statistics on how bad the problem is within a product niche. A lot of the "data" is based upon speculation/assumptions. As usual, it comes down to the *greed* aspect.
 

Miner

Forum Moderator
Leader
Admin
Counterfeiting of electronics is at epidemic proportions. It was particularly bad when the economy started to pick up. Apple had most electronics locked up for the iPad and iPhone. OEM electronic manufacturers were rationing everyone else and were afraid to ramp production back up over fears of a double-dip.

Here is a good overview of the issue.
 
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