Security Breach: NY Firm, Executives Charged With Selling Chinese Tech As US Made To Government Military

Seven people associated with a Long Island, N.Y., security technology firm are facing charges of selling Chinese equipment with known security flaws to the U.S. military and claiming the equipment was made in the United States.

Federal agents from the FBI, U.S. Customs, the Internal Revenue Service and other agencies Thursday raided Aventura Technologies of Commack in a scheme involving equipment with a “known cybersecurity vulnerablilty,” U.S. Attorney Richard Donoghue said.

"Aventura not only defrauded their customers, but also exposed them to serious, known cyber security risks and created a channel by which foreign adversaries and other actors could potentially access some of our government's most sensitive facilities and computer networks," Donoghue told a news conference.

The equipment was placed at Army and Air Force bases, at the Department of Energy, at Navy installations and aboard U.S. aircraft carriers, as well as at private companies.

"As they operated this scheme for more than a decade, the owners and operators of Aventura grew rich, trading our national security for personal profit," Donoghue said.

The raid came as U.S. officials were deciding whether to allow Chinese tech firms to have access to sensitive U.S. networks and facilities.

“As alleged, the defendants falsely claimed for years that their surveillance and security equipment was manufactured on Long Island, padding their pockets with money from lucrative contracts without regard for the risk to our country’s national security posed by secretly peddling made-in-China electronics with known cyber vulnerabilities,” Donoghue said in a statement.

Agents seized records, bank accounts and a 70-foot yacht.

Those arrested included the reputed owner, Jack Cabasso, 61, of Northport, and his wife, Frances, 59, who was the CEO. A court appearance in Brooklyn was set for Thursday.

Also charged were Jonathan Lasker, 34, of Port Jefferson Station, Christine Lavonne Lazarus, 45, of Shirley, and Eduard Matulik, 42, of North Massapequa, Wayne Marino, 39, of Rocky Point, and Alan Schwartz, 70, of Smithtown.

The suspects face charges of conspiracy to commit wire and mail fraud and money laundering. Charges also were lodged involving false claims that Frances Cabasso was the owner to gain access to funds reserved for women-owned businesses.

Aventura, founded in 1999, bills itself as a “single-source” manufacturer of security hardware, software and peripheral products.