The Justice Department said Monday that Peter Picone, 41, of Methuen, Mass., pleaded guilty in U.S. District Court in Hartford, Conn., to importing thousands of counterfeit integrated circuits from China and Hong Kong, and then reselling them to U.S. buyers, including contractors supplying them to the U.S. Navy for use in nuclear submarines.
As part of a plea agreement with the government, Picone agreed to a forfeiture money judgment of $70,050 and the forfeiture of 12,960 counterfeit circuits seized during a search of his business and home. Sentencing is set for Aug. 22, the Justice Department said.
According to court filings, from 2007 through 2012, Picone conspired with his suppliers in China and Hong Kong to sell “millions of dollars’ worth” of circuits bearing the counterfeit marks of about 35 electronics manufacturers, including Motorola, Xilinx and National Semiconductor.
“Many of Picone’s customers specified in their orders that they would not accept anything but new ICs (integrated circuits) that were not from China, but Picone told them that the ICs were new and manufactured in Europe,” the department said. “Testing by the Navy and one of its contractors revealed that, in fact, the ICs purchased from Picone had been resurfaced to change the date code and to affix counterfeit marks, all in order to hide their true pedigree.”
This is the second conviction ever on a charge of trafficking in counterfeit military goods, a relatively new provision in the U.S. Criminal Code that was enacted as part of the 2011 National Defense Authorization Act.