Commack business owner admits selling Chinese surveillance, security products as made in USA

A Commack business owner accused of fraudulently selling Chinese-made surveillance and security equipment to the federal government, contractors and private businesses pleaded guilty Wednesday to conspiracy to commit mail and wire fraud.

Jack Cabasso, the owner of Aventura Technologies, acknowledged in Central Islip federal court that he told clients the surveillance and security equipment was manufactured in the United States.

Federal authorities have said Chinese-manufactured equipment has exposed the military and federal agencies to cyber surveillance and attack. Several other company executives and associates have already pleaded guilty for their roles in the scheme and are awaiting sentencing.

Cabasso, 65, of Northport, also admitted he ran the company, even though his wife, Frances Cabasso, was listed as the owner on corporate filings in order to qualify for government contracts as a woman-owned business.

“My wife controlled the company on paper,” Jack Cabasso told U.S. Magistrate Judge Arlene Lindsay. “I was the person who controlled the company.”

He will be sentenced by U.S. District Judge Joan Azrack at a later date. The maximum penalty for conspiracy to commit mail and wire fraud is 20 years in prison. Federal sentencing guidelines, Lindsay said, call for a sentence of 121 to 151 months, or between 10 and about 13 years.

Cabasso’s attorney, Barry Zone of Manhattan, said after Wednesday’s hearing that his client was a victim of “selective prosecution” by the government because many day-to-day electronics, such as iPhones, are made in China.

“He regrets what he did and he has accepted responsibility,” Zone said.

Frances Cabasso, 63, pleaded guilty to conspiracy to commit mail and wire fraud on Dec. 11 before Lindsay and will also be sentenced at a later date. Federal sentencing guidelines call for between 10 to 16 months in prison.

Assistant U.S. Attorney Alexander Mindlin told Lindsay that the government has a significant amount of evidence, including company records and communications between Jack Cabasso and other defendants charged in the scheme, that indicate Aventura sold security equipment it claimed was manufactured in the United States but was actually produced in China.

As part of the plea agreement, Aventura Technologies also pleaded guilty and the company agreed to “wind down” business operations, Mindlin said. Jack and Frances Cabasso will also forfeit assets seized by the government in 2019 searches of their home and offices, he added. Prosecutors previously said seized assets included a 70-foot luxury yacht called Tranquilo, valued at $700,000, and more than $3 million from bank accounts.

The investigation began in 2017 after a tipster reported the schemes to the General Services Agency's inspector general hotline, officials have said.

The scheme netted about $88 million in sales, including $20 million in government contracts between 2010 and 2019, according to the authorities.

The Chinese-manufactured equipment included network surveillance cameras imported through Kennedy Airport.

Some of the items, according to prosecutors, were premarked “Made in USA” with an American flag and Aventura's logo before being shipped from China to the United States. Markings indicating Chinese provenance were removed.

The equipment fraudulently labeled as American-made, including body cameras for Air Force personnel, was placed on Army and Air Force bases, in Department of Energy facilities, and at Navy installations and aircraft carriers, prosecutors said. The company also sold the goods to private companies, which paid a premium for what they thought were American-made items.

The government also alleged the Cabassos laundered money, siphoning Aventura’s illegal profits out of the company and through a network of shell companies.

The Cabassos and the five other defendants were additionally charged in the 2019 indictment with conspiracy to commit wire fraud for the country of origin scheme and unlawful importation. The Cabassos were additionally charged with money laundering conspiracy.

Senior executives in the company who previously admitted their guilt include Jonathan Lasker, 38, of Port Jefferson Station, director of operations; Christine Lavonne Lazarus, 49, of Shirley, director of business development; and Eduard Matulik, 46, of North Massapequa, director of international sales; along with Wayne Marino, 43, of Rocky Point, a network specialist; and Alan Schwartz, 74, of Smithtown, who was a systems engineering manager before retiring shortly before the indictment. They all await sentencing.