ERAI Blog

Independent Distributor Pleads Guilty to Supplying Counterfeits to US Military

Anne-Liese Heinichen
ERAI, Inc.

Independent distributor Rogelio Vasquez, aka Roger Vasquez aka James Harrison, pleaded guilty on December 27, 2018 to knowingly supplying counterfeit parts to the US military including parts that were historically used in military applications including the B-1 Lancer Bomber aircraft. If the counterfeit ICs had been used in the B-1, they, “would have likely caused impairment of the combat operations, or other significant harm to a combat operation because a failure of the counterfeit ICs would impact the B-1’s operational capabilities.”¹

Vasquez has signed a plea agreement in which he has agreed that he, “knew that the ICs he bought from China were old, used and/or discarded ICs and further…knew that after they were blacktopped, the ICs were re-marked with trademarked marks and then further re-marked with an altered date code, lot code and/or country of origin code, to appear as if they were new and original equipment (“OEM”) parts.”² In email communications, he discussed with his Chinese suppliers how to remark product to avoid detection by customers and to not include their name on shipments so customers could not contact them directly. Vasquez has agreed to plead guilty to wire fraud, trafficking in counterfeit goods and trafficking in counterfeit military goods.

Starting in 2009, Vasquez operated an independent distribution company, PRB Logics Corporation, from his house in Orange, California. In August 2012, Vasquez bought unspecified counterfeit ICs from China and subsequently sold them to a defense subcontractor; the parts were discovered to have been used in a classified US Air Force weapon system.

Between November 2015 and May 2016, Vasquez knowingly sold 82 counterfeit Xilinx ICs and 24 counterfeit Analog Devices ICs that had military applications totaling $91,580.00 to undercover agents. In a telephone conversation with agents, Vasquez assured undercover agents that his Chinese suppliers would “do a perfect job of re-marking the parts” and further offered to have his supplier provide photos for the military customer. In another conversation, Vasquez was informed that the counterfeit parts he was supplying were being procured for the B-1 Bomber by a top defense contractor. Vasquez assured the undercover agent that the parts would be remarked with a specific date code to meet the government’s requirement. The undercover agent knowingly provided Vasquez with a date code that was fake according to Xilinx; subsequent communications showed Vasquez instructing his Chinese supplier to mark the parts with that same non-existent date code.

In April and May of 2016, Vasquez sold 8,000 pieces of counterfeit Intel part number S80C196KB12 to a company who subsequently sold them to a defense contractor and subcontractor. These parts are used in products with various military applications used by the US Army, US Navy and US Marine Corps. For this purchase from China, Vasquez allegedly “instructed a testing laboratory in China to provide him with two versions of its test report; one to defendant Vasquez with all test results and a separate sanitized version to provide to his customer (which the customer, in turn, would provide to the end user) without the results of any visual inspection and permanency or other marking test (‘marking tests’), which would have revealed that the ICs were used, remarked and/or in poor condition.”³ Unfortunately, the Chinese testing laboratory still remains unnamed.

During a raid on his house, federal agents uncovered 1307 pieces of counterfeit Xilinx parts commonly used in military applications, including 480 pieces of counterfeit Xilinx part number XC2V1000-4FGG456C with date code 0725, and $97,362.00 in cash hidden throughout his garage, which has been since forfeited by Vasquez.

While operating as PRB Logics, Vasquez was previously reported by ERAI three times for suspect counterfeit product in 2011, 2012 and 2013 as well as for a past due invoice in late 2017. Vasquez has also been associated with several other companies that have been reported by ERAI and is thought to have used additional aliases not named in the indictment.

Vasquez is facing a total maximum sentence of 60 years’ imprisonment, 3 years’ supervised release; a fine of $9,250,000.00 or twice the gross gain or gross loss resulting from his offenses, whichever is greater, a special assessment fee of $400.00; restitution to the victims currently estimated at $802,638.00; and deportation and other immigration-related consequences. Sentencing is scheduled for May 10, 2019.

Additional Reading:

Click here to read Rogelio Vasquez’s Guilty Plea

Click here to read the complaint against Rogelio Vasquez

For organizations that are members of ERAI, please login to the ERAI website and search the companies’ database for “PRB Logics Corporation” to view the alerts issued against Rogelio Vasquez and PRB Logics.

For organizations that are members of GIDEP, see Agency Action Notice Document Number: AAN-U-18-313.

¹ United States of America v. Rogelio Vasquez Guilty Plea, December 27, 2018.
² United States of America v. Rogelio Vasquez Guilty Plea, December 27, 2018.
³ United States of America v. Rogelio Vasquez Indictment, April 27, 2018.