Risk & Compliance

New York Tech Company Charged with Selling Chinese Equipment to U.S. Military

Aventura Technologies allegedly tried to conceal that the Chinese-made surveillance and security equipment were made in America.
Lauren MuskettNovember 7, 2019

Seven current and former executives and employees of Aventura Technologies were arrested early Thursday after agents from the Federal Bureau of Investigation, U.S. Customs and Border Protection, the Internal Revenue Service, and other agencies raided the headquarters of the company on Long Island, New York.

U.S. Attorney Richard Donoghue, in a press conference at federal court in Brooklyn, said the charges were related to sales of security and surveillance equipment that had been made in China to the U.S. government, including to the U.S. military, while claiming the equipment was manufactured in the United States.

Donoghue said the equipment had known cybersecurity vulnerabilities and that Aventura was, “trading our national security for personal profit.” The company allegedly tried to conceal that the equipment was made in China, including adding fake “Made in the USA” labels.

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According to prosecutors, the company produced more than $88 million in revenue since 2010. The alleged scheme began in 2006.

According to the criminal complaint, the company’s largest customers include the U.S. Army, Navy, and Air Force.

The company, founded in 1999, is described as a security technology specialist whose products include X-ray scanners and turnstiles to license plate recognition software and system architecture services.

The arrests include Jack Cabasso, Frances Cabasso, Jonathan Lasker, Christine Lavonne, Shirley Matulik, Eduard Matulik, Wayne Marino, and Alan Schwartz, who recently retired from the company.

According to various reports, dozens of investigators were seen hauling containers of equipment away for examination. Authorities also seized bank accounts and a yacht bought with money made through the fraud.

Frances Cabasso is identified as owner and chief executive officer of the company; however, four of the defendants are charged with claiming, falsely, that Frances Cabasso was CEO when the company was in fact run by her spouse, Jack Cabasso.

The pair allegedly lied about the arrangement to gain access to government contracts reserved for women-owned businesses. Prosecutors also alleged that the Cabassos laundered proceeds from the fraud.