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- Feds close the books on a huge chip counterfeiting scheme (exclusive)
- Star Wars: The Old Republic release date is December 20 this year
- Week in review: Change comes to Facebook — and Silicon Valley
- Google News introduces new tool to highlight quality articles
| Feds close the books on a huge chip counterfeiting scheme (exclusive) Posted: 25 Sep 2011 08:25 AM PDT Pages: 1 2
The case highlights the growing problem of chip counterfeiting, which can put dangerously flawed electronic components in everything from U.S. military weapon systems to everyday consumer electronics goods. In this case, the defendants were busted in an undercover operation, and records from the case “paint a disturbing picture of the complex level of fraud taking place behind the face” of the VisionTech web site and its offices, according to a sentencing document. The case offers a rare peek into the shadowy underworld of chip counterfeiting. The scary part is that the chips are used in critical systems and there is no telling when they will suffer a catastrophic failure. VisionTech’s counterfeit components were sold to every sector of the electronics industry, and most of those devices have still not been recovered. “Counterfeit products may cause vehicles, trains, or planes to crash,” said one chip maker who testified in the case. But too often, these kinds of crimes go unreported because companies don’t want to admit they’ve been bamboozled. U.S. Attorney Ronald Machen of Washington, D.C., and Sherri Schornstein, Assistant U.S. Attorney, said the harm caused by the case is “immeasurable and cannot be undone.” Prosecutors point out that a single short-circuit can ruin a chip and knock out a critical system in a fighter jet. That’s why counterfeit chips are “extremely disturbing and” raise public health, safety and national security concerns, the document said. In their document, the prosecutors said, “It is impossible to retrieve the hundreds of thousands of counterfeit devices sold by VisionTech.”
The chips sold by VisionTech were supposed to be “military grade,” but they were in fact counterfeits from Hong Kong and China. VisionTech employee Stephanie McCloskey pleaded guilty in the case and is awaiting sentencing at the end of the month on charges related conspiracy to distribute counterfeit chips and commit mail fraud. McCloskey admitted to one count of conspiracy and aiding and abetting, and she agreed to cooperate with the investigation. Her upcoming sentencing is the first ever involving distribution of counterfeit integrated circuits, or chips, according to the document. The owner of VisionTech Components, Shannon Wren, who lived in Treasure Island, Fla., died of an apparent drug overdose in May. The 42-year-old Wren was described as having a passion for drag racing. He owned an apparel store in a trendy Tampa district and was a regular at the Pinellas Park SunShine Dragstrip. Had Wren been tried, he could have faced 35 years in prison. On Sept. 14, 2010, Wren and McCloskey were both arrested in Florida. In the raid, police seized luxury vehicles, a motor home, numerous motorcycles, a beach home and four other properties, and funds in several bank accounts. More than 30 computers and 200 boxes of suspected counterfeit chips were taken. To gather evidence, investigators had to forage through 16 terabytes of data, or the equivalent of 4 million pages of text. At the outset, investigators charged Wren and McCloskey with 10 counts related to counterfeiting and accused them of selling fake chips to 1,101 buyers for $16 million over five years. The firm had nine employees. Some of the chips in question showed evidence of “black topping,” a process where counterfeiters grind off the original markings, paint the packages with a black paint, and then re-mark the devices with counterfeit marks. The marks falsely suggest that the devices have a certain brand, date code, lot code or country of origin, and are of a certain quality. Re-marked chips can be sold for much higher prices. Inspectors can visually spot remarked chips sometimes, but they can also use “acetone testing” to check the permanency of ink-marked integrated circuits. Legitimate chips will always pass the acetone test, because the ink is cured to ensure that acetone or other corrosive elements will not remove the original ink markings. Inspectors can also examine a chip with X-rays to see if the chip is properly connected to its package. But electrically testing a chip often requires an expensive piece of equipment. In 2007, a VisionTech employee told its fake-chip supplier to use “stronger ink” and to use acetone to “make sure the ink does not come off” because customers were beginning to use acetone on all parts. The chips were acquired from sources in China with the counterfeit marks on them, and they were imported into the U.S. through a variety of ports. On 35 different occasions, chips destined for VisionTech were seized at U.S. ports as counterfeit. A total of 59,540 chips were seized. Wren never challenged a single one of these seizures. And from 2007 through mid-2010, VisionTech imported 3,263 shipments — 95 percent of them from the same fake chip supplier in China. When U.S. officials began inspecting packages labeled “integrated circuits,” VisionTech started labeling them “electronic components.” Companies that claimed damages from the chip fraud included major chip firm such as Analog Devices, and Raytheon. Other named customers that were victims of VisionTech are Dependable Component Sourcing, LCL Electronics, ITC Medical, Greystone Components, Bisco Industries, Abacus Technologies, Able Electronics, Global Wide Electronics Group, Baya Technologies, Merefield Electronics and Atonic Technologies. Distributors such as Component Sourcing Solutions and Pacific IC Source lost some of their valued customers, based on the fact that they had bought chips from VisionTech. Raytheon found 1,500 flash memory chips it bought from Pacific IC Source, which bought the chips from VisionTech, were counterfeit. The devices were installed on 28 circuit cards assemblies and all failed. That cost Raytheon tens of thousands of dollars. Raytheon filed a report and cut off Pacific IC Source as a customer. “I feel as though I have been made a fool,” said Naomi Ryder, the president of Pacific IC Source, according to the document. “Just the thought that someone could have died because of this crime sickens me.” In a letter to Wren, Atonic’s representative said, “Listen Shannon. We are talking about planes and military, security devices….We already have had many issues with you and you already made me lose my top five customers.” A representative at Global Wide Electronics Group said in an email, “Who works in your warehouse — Stevie Wonder? These parts are awful.” Pages: 1 2 Filed under: VentureBeat        
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| Star Wars: The Old Republic release date is December 20 this year Posted: 24 Sep 2011 06:56 PM PDT Game publisher Electronic Arts today announced that Star Wars: The Old Republic, one of the company’s most anticipated online games, will come out in December this year. The Old Republic is Electronic Arts' Hail Mary pass in online games and aims to rip users away from rival online games, such as Blizzard Entertainment's seven-year-old game colossus World of WarCraft. If Electronic Arts succeeds, it will have persistent revenues coming in from subscription fees charged to users. Electronic Arts' game is expected to be a subscription-only premium title. BioWare, the team behind the original Knights of the Old Republic and Mass Effect games, is developing The Old Republic. Electronic Arts is hoping that throwing that team, which knows how to make games with a great story and cinematic experience, will be enough to pull subscribers away from World of Warcraft — which has dominated the online gaming space for nearly 7 years. World of Warcraft has more than 11 million subscribers and has dominated the subscription-based online gaming industry since it came out in 2004. The game is a massive source of revenue for Blizzard Entertainment, which charges gamers around $15 each month to access the game's persistent world. Electronic Arts will use a similar subscription model, charging around $15 per month. Electronic Arts chief executive John Riccitiello said Star Wars: The Old Republic needs 500,000 paying subscribers to break even and 1 million subscribers to be profitable. If Electronic Arts gets 1.5 million to 2 million subscribers, it will be enough to "make it look like a great investment and justify the purchase of BioWare Pandemic (the developer behind The Old Republic)," Riccitiello said. Electronic Arts bought BioWare Pandemic for $800 million in 2008. Filed under: games        
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| Week in review: Change comes to Facebook — and Silicon Valley Posted: 24 Sep 2011 01:23 PM PDT There was a lot going on in the tech world this week. On Thursday Facebook held its annual f8 conference. If you missed the news, read Tom Cheredar’s summary: 7 drastic Facebook changes you will probably hate. Or listen to executive editor Dylan Tweney’s radio appearance on the California Report, in which he discusses Facebook’s news. Netflix split into two companies, one for DVDs called Qwikster, and one for streaming video called Netflix. (Nobody liked that idea.) And then there was Meg Whitman, HP’s new CEO, replacing the bumbling Léo Apotheker. Here are the most popular stories on our site this week. Most popular
Google+ launches the first of its APIs iPhone 5 launch spurs Sprint to kill annual upgrades Apple’s iPhone 5 event said to be held Oct. 4, starring CEO Tim Cook PETA launching its own porn site, peta.xxx Editor’s picksNow, let’s take a look at a few great stories you might have missed. Read these, bookmark them, Instapaper them and share them with your friends!
Diablo 3 beta is short, sweet and a sign of great things to come (hands on) Review: Gears of War 3 is like Band of Brothers with lady warriors and real closure Cory Doctorow: Tech companies exploit the way we undervalue privacy How to change the world: advice from Facebook, the Kinect team, Elon Musk & Salman Khan
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| Google News introduces new tool to highlight quality articles Posted: 24 Sep 2011 01:07 PM PDT
The Google News team is asking publications to use a new Standout tag in their HTML to mark “exceptional original reporting, deep investigative work, scoops and exclusives, and various special projects that quite clearly stand out,” the company says in a blog post. Marked articles may be anointed with a “Featured” label in Google’s listings, but it’s not guaranteed. It’s a common problem facing online publications: extra time, money and effort are put into generating original features. But these articles are often lost in a sea of breaking news, rebogged content and iPhone 5 rumor posts. Google’s new tag will allow publishers to mark the articles they have put additional effort into, hopefully helping the pieces get the recognition (and traffic) they deserve. A publication can only use the tag on seven of its own articles a week, but it can use it an unlimited number of times when linking to worthy articles on other sites. Currently, the feature is only available for the U.S. edition of Google News. To use the Standout tag, add it to the HTML header of an article, or to any link pointing to another site’s article, like this: <link rel=”standout” href="http://www.example.com/scoop_article_2.html" /> Google hopes the feature catches on as more than just a tool for self-promotion, since it encourages respect and recognition between publications. “Linking out to other sites is well recognized as a best practice on the web, and we believe that citing others' standout content is important for earning trust as you also promote your own standout work,” the company says. [via Search Engine Land] Filed under: media, VentureBeat        
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