A 32-year-old California man has pleaded guilty to selling thousands of counterfeit computer processors to the US Navy.

Neil Felahy of Newport Coast, California pleaded guilty to conspiracy and trafficking in counterfeit goods charges. As part of a plea bargain Felahy has agreed to co-operate with the US authorities.

He faces a possible five year prison sentence and a $250,000 fine for the conspiracy charge and 10 years and $2m for the counterfeiting offences. In reality he is more likely to receive a 30 to 51 month sentence.

Felahy's wife and brother-in-law face related charges. They are accused of importing counterfeit chips from China and selling them to the public via a website. They are also accused of grinding off existing trademarks or grades on chips and regrading them - processors are typically marked commercial grade, industrial-grade or military-grade depending on quality and testing.

Thirdly the gang are accused of harvesting dies from integrated circuits, repackaging them as new and selling them on.

On 22 different occasions the gang brought a total of 13,000 chips from China and sold them on for over $140,000.

The dodgy dies included kit wrongly marked with trademarks from Altera, Analog Devices Inc, Intel, National Semiconductor, ST Microelectronics and VIA Technologies.

The US Attorney press release is available from here. ®