3 Charged With Selling Counterfeit Computer Chips to Navy, Others

Three members of a California family have been charged with selling counterfeit computer chips to the Navy and other government agencies.

Mustafa Aljaff, 29, his sister, Marwah Felahy, 32, and her husband, Neil Felahy, 32, were arrested Thursday in their home town of Newport Coast, Calif., authorities said. Officials said the counterfeit circuits they sold could cause sophisticated military and government equipment to fail.

An 11-count indictment that charged the Felahys and Aljaff with mail fraud, trafficking in counterfeit goods and conspiracy was unsealed Thursday in the District's federal court. Authorities said the three ran several California companies that sold "integrated circuits," a type of semiconductor used in medical equipment, aircraft and weapons systems.

Federal prosecutors said the three contracted this year to provide integrated circuits to the U.S. Navy and other government agencies. They shipped such circuits to the Navy.

They obtained the counterfeit circuits by importing them from China, the indictment alleges. Prosecutors said they imported more than 10,000 such chips.

Prosecutors said the Felahys and Aljaff also created counterfeit circuits by sanding off a circuit's markings, repainting the devices and adding new markings. That process allowed them to pass off the devices as being a different brand or military grade, the indictment alleges.

"This case highlights the significant potential impact such crimes also can have on public health and safety as well as national security," Acting U.S. Attorney Channing Phillips said in a statement.

It is not clear when the Felahys and Aljaff will appear in the District's court. They were arraigned late Thursday in a federal court in California. Their attorneys could not be reached to comment.