US Issues Criminal Charges Against Aventura For Fraudulently Selling Hikvision And Other China Products
By John Honovich, Published Nov 07, 2019, 12:25pm ESTThe US government has made an unprecedented move on the video surveillance supply chain, charging a US company, Aventura for "having conspired with PRC [China] manufacturers" primarily Hikvision, "by falsely claiming that AVENTURA manufactured its own products" and claiming some to be made in the USA.
The US Attorney's presentation called out protecting the USA's "technology supply chain from foreign adversaries and those who would trade our national security for personal profit", as the clip below shows:
The 9-page complaint press release and the 56-page complaint spells out the details of the US government's case.
Conspired with PRC Manufacturers
The complaint alleges that Aventura 'conspired' with PRC manufacturers to falsely claim Aventura made its own products:
Dozens of video surveillance companies regularly and falsely claim to manufacturer their own products, backed by the US Security Industry Association, and this raises concerns for much of the industry.
Hikvision is PRC Manufacturer-1
Hikvision, 'owned by the Government of the PRC', per the complaint, is at the center of the China side, identified throughout as 'PRC Manufacturer-1' and when Hikvision USA is mentioned as 'PRC Manufacturer Subsidiary-1' as shown below:
The complaint's allusion to Hikvision above is confirmed by Schwartz's LinkedIn Profile:
A Hikvision USA employee promised to change Hikvision products such that it would not be discovered that the products were from Hikvision, says the complaint:
Even as recently as the end of 2018, the complaint alleges that Aventura worked with Hikvision USA to hide Hikvision's brand:
Many industry people will retort this is common practice and it is. However, there has long been ethical questions of Hikvision and other China manufacturer's practice to hide their branding and involvement from generally unsuspecting American end-users.
Moreover, the US government emphasized the contradiction about Aventura's head Cabasso calling out Hikvision's government ownership and cybersecurity concerns:
IPVM broke the news in 2016 about The US Embassy in Afghanistan using Hikvision. Hikvision was created and is owned by the PRC Chinese government.
Hikvision was Aventura's largest supplier, according to the complaint, both in terms of shipments:
And in total dollar amount:
The second-largest partner, 'Manufacturer-7', is identified as shipping from Shenzhen but without enough other details to determine who 7 is. However, 7 is alleged to have shipped products as faked 'Made in the USA' as the complaint describes:
And an example of the fake 'Made in the USA' camera (from PRC man 7) in the complaint is shown below:
Cybersecurity Risk
The US government press release emphasizes the vulnerabilities in equipment sold as well as concealing the source:
selling Chinese-made equipment with known cybersecurity vulnerability to government and private customers while falsely representing that the equipment was made in the United States and concealing that the products were manufactured in the People’s Republic of China (PRC)
Indeed, the very start of the US Attorney's presentation made it clear this was not just about cybersecurity but 'national security' to 'protect our military and government technology infrastructure from being compromised' as the excerpt below shows:
Hidden Re-Selling of Chinese Equipment Widespread
Hidden re-selling of Chinese equipment has been widespread in the video surveillance industry for many years. It has been so widespread that many, if not most, industry people view it as normal. For example, Honeywell hid OEMing Dahua for many years, as we exposed in this report and video below:
Our directories of China OEMs featuring big names including Panasonic, Honeywell, Stanley have been viewed 100,000+ times over the past year as buyers and industry people try to determine who makes what equipment. See:
Some companies are honest and forthright about what they are selling but most companies, in our experience, normally deny the true source.
Moreover, the US Security Industry Association has facilitated this deception to help their members, like Aventura, profit as we examined in 2018 - SIA Plays Dumb On OEMs And Hikua Ban.
In the announcement, the FBI added:
We have heard many industry people now are now scared. They should be. The industry's complacency about accepting vendors hiding PRC-made products and misrepresenting them as their own needs to stop.
Update: Indictment Filed
The indictment was filed on December 9, 2019:
Most of the points made look to be the same from an initial scan, though more details have been added about specific accounts frozen.
7 reports cite this report:
Comments (166)
Update and correction: the document we shared earlier is technically the complaint press release.
I've found the full 56-page complaint - download here, screencap below:
We need to read through and then will update our reporting. Anyone who finds anything interesting, of course, feel free to share in the comments immediately.
why aren't the prc manufacturers named in the documents ? or they are named and I missed it.
it mentions 4 companies in total
I don't know why they are not named but there are no explicit names in the complaint or any document we have seen.
So far, the only one that we can identify is Hikvision. They are the biggest partner and the government provides lots of identifying details.
Related, here is a table from the document:
Altogether, there are 7 manufacturers mentioned across the documents.
Update: The DoJ shared with IPVM a copy of the detention memorandum for Jack Cabasso:
One notable point is that "Cabasso has a lengthy criminal history, including numerous crimes involving deceit and efforts to interfere with judicial proceedings". There is literally a long list, excerpted below:
- "On April 30, 1982—when Cabasso was just 23 years old – he was convicted of two counts of grand larceny in the second degree, in violation of N.Y.P.L. § 155.35(1) for which he was sentenced to 50 days’ imprisonment and 58 months’ probation."
- "on December 6, 1985, Cabasso was convicted of attempted grand larceny in the second degree, in violation of N.Y.P.L. § 155.35(1) for which he was sentenced to five years’ probation. "
- "He was convicted in 1992 of conspiring to influence a juror, in violation of 18 U.S.C. § 371. See United States v. Cabasso, et al., No. 92-CR-697 (ADS) (E.D.N.Y.) (the “1992 Case”). That conviction arose from Cabasso’s attempt to influence a juror serving in a separate criminal case charging him with another wire fraud scheme."
- "In March 2000, Cabasso was convicted of, among other charges, enterprise corruption, in violation of N.Y.P.L. § 460.20, for his participation in a stock-fraud scheme that reportedly stole $176 million from 16,000 investors."
Key claim from the press release:
In some cases, cameras shipped from the PRC were pre-marked with Aventura’s logo and the phrase “Made in USA,” accompanied by an American flag. In many instances, the items were later resold to government agencies to whom the defendants falsely represented that the products were American-made. [emphasis made]
UPDATE/ CORRECTION: The compliant does identify the source of the 'made in USA' stickers, it is from 'manufacturer-7' with a Guandong Province address but unnamed and without enough detail for us to identify.
It will be interesting to see what the FBI, DoJ, etc. does to the PRC manufacturers who shipped products falsely labeled as made in the USA.
Labeled as "Made in USA" and shipped in directly from China...
If true, I see this as certainly an issue. Did the OEM do this, did Aventura hire another contractor in China to do this? All possible.
Still reading through the full complaint but this section alludes to a Hikvision USA employee promising that Hikvision would adjust the firmware so the cameras being sold to Aventura would not be detected as from Hikvision:
Hikvision clearly had knowledge and contributed to this, such as the action above.
On the other hand, you can certainly say "This is something Hikvision et al normally do", however, the practice has always been shady, to say the least.
| 11/07/19 11:05pm
WOW!
If they were having the manufacturer put "Made In USA" stickers on the products right from the factory, thats just boldly dumb.
Im surprised they were able to get away with it this long.
Here is an example from the Complaint of an Aventura camera labelled 'Made In the USA':
I knew this from many years back when Aventura installed a project and all cameras where labeled Aventura but MACs, formats and even exploits were all Hikvision.
I'm not sure I like this development. I'm no fan of HikVision, but this seems pretty heavy-handed. I would have thought that they* could just issue a large fine and move on. I guess lying about the country of origin makes it illegal importation, which is the same as smuggling and gets treated the same way?
Reminds me of a time in Oklahoma City when the police were en route to a target for a raid of some sort, and one of the guys with them was a health inspector, and he said, "Hey, I need to do an inspection of this restaurant and it's on the way," so the restaurant got to have a bunch of police men wearing guns barge into the kitchen and look around. Somebody had to issue an apology after that. (I can't find the article on the Oklahoman's website, so I may have gotten part wrong, but I believe the gist of it is accurate.)
I fail to see why cybersecurity is mentioned in the complaint. It is not illegal to sell devices with cybersecurity issues in the U.S. (thankfully, else Amazon and Walmart would have been shut down long ago). Do they have to prove harm in order to charge with illegal importation? Otherwise it looks irrelevant as it is not providing direct evidence for any charge.
* Commerce Department? Not sure who has oversight.
#1 Lying to the Government is a very big deal.
#2 What are the odds Honeywell gets raided?
#2 What are the odds Honeywell gets raided?
From what I have seen, Honeywell has not claimed their Dahua OEMed products are Made In the USA. Maybe they have privately or in places I have not seen. I would guess that would help them.
But this reinforces gone are the days where you can play coy or brush off concerns about whether you are relabelling Chinese products as one's own.
Cabasso stated that PRC Manufacturer-1 “will acknowledge they manufacture no products outside of China,” and appended an article about the removal of cameras manufactured by PRC Manufacturer-1 from the U.S. Embassy in Afghanistan.
do we know if this refers to the IPVM article?
perhaps, when reading the Embassy expose, the GSA serendipitously came across the Aventura article...
or at least i’d like to think so ;)
The complaint refers to the IPVM 2015 discussion:
My first reaction was one of relief that DOJ is taking this very seriously. It wouldn't surprise me if additional charges are piled on after forensics on their files and records are completed, including espionage act charges. As a retired Navy man, I am very happy with this operation, and I suspect this is only the start of a large scale crackdown. Aventura is likely not alone in this sort of scam, and as I write this I'll bet you DOJ has already identified others. Want to stay legit? Sell safe, effective products that are manufactured by friendlies at market wages. Hopefully a side benefit will be a correction of the cost curve in IP markets.
I forgot all about Aventura. I remember talking to them a few years ago about a project that was spec'd with their products. Lavonne told me they were the only USA made IP camera manufacturer at the time. Don't remember if I bid the project or not. As far as Aventura was concerned their products were better than sliced bread.
According to Aventura (Jack Cabasso in his own words), the project they implemented on my Caribbean island could not be understood and/or maintained by anyone on the island as we do not have sufficient knowledge for this.
Kudos to the intrepid member (Undisclosed #1) who posted in this thread in 2015 Is Aventura Really An American Manufacturer?
He or she was on to it almost 5 years ago!
Excellent work, make America great !
Finally!
I am glad to see that Aventura has been exposed and publically charged. I recall several years ago on a tender in the Middle East that Aventura was specified and part of the tender required products to be Made in America. I pushed my partner to challenge this, but he stated that while several questioned the ability of Aventura to supply 100% American made products that Aventura actually produced Country of Origin documents that all of their IP products were in fact Made in the USA.
We went further and suggested to our partner that the end-user request a factory visit to validate this. At our advice the end-user did that, but received a BS story back that Aventura would be happy to host them at their HQ, but couldn't allow them to visit the factory. The story at the time was that they do so much business with government entities around the world that their factory is too "top secret" to allow individuals to visit.
#hilarious
Ultimately, the end-user didn't go with our bid, but at least wised up and didn't choose Aventura!
NBC News has a video of this:
What is explained is not new but there is video of the Aventura office, etc. And the fact that it is being covered on the news shows the attention this is getting it.
While the China element is the lead of the complaint, interestingly they are also charged with fraud for falsely claiming to be a woman-owned business:
defrauding the U.S. government by falsely claiming that Frances Cabasso was the owner and operator of the company in order to obtain access to valuable government contracts reserved for women-owned businesses when, in fact, Aventura was actually controlled by her husband, Jack Cabasso.
My perception is a number of industry companies try to take advantage of such situations. At the same time, I doubt it's common for the government to crack down on that alone, it's worth keeping in mind for people who do this or consider doing this.
This is great news. As to the excuse about a factory audit we are also in the business of supplying the federal government and have no issue with factory visits.
Transparency is a good thing. I hope the crackdown continues and whoever PRC# that helped with this conspiracy is banned from all sales in the US.
is selling hik products that are made elsewhere (e.g. India ) also banned ?
Hikvision products, as of today, work this way:
- Products made in China and imported to the USA are generally assessed a special / additional tariff, depending on its code / category.
- Hikvision now has a factory in India. If Hikvision ships those products from India and the US accept them as made in India, those products will not be subject to the made in China special tariffs. So far, we have not seen Hikvision ship any products from India to the USA, that, of course, could change in the future.
- Hikvision is commercially generally not banned in the USA. Hikvision products are banned for USA federal government use. In 9 months, the NDAA ban is scheduled to add bans for projects with federal funding and for those who sell Hikvision commercially (though this has been contested and has some possibility of being withdrawn).
The specific problem here is beyond the general Hikvision 'issue', it has to do with the allegations that Aventura passed off Hikvision and other Chinese manufacturer products as Made In The USA, which is considered fraud.
To be clear, fraud is the problem here, not Hikvision. The seller was deliberately hiding the country of origin while claiming that the products were made in the USA. It seems they were specifically pursuing contracts that called for "Made in the USA" products, which led to them getting a lot of fraudulent sales to the US government.
You can sell Hikvision as much as you want if you're honest about it. This company was very much not honest.
The problem is indeed hikvision. They sold what we believe are HIK products fraudulently, yes, and that is the basis of the warrant. However, this would never have been an issue if there wasn't a HIK, and all of the nefarious facts surrounding it. The base problem is hik, the allure of a cheap product with strings attached (that nobody talked about, especially to clients) that lowlifes like this flooded our economy with. If that allure didn't exist, and installer/integrators had same damn ethics, I don't think we'd be seeing this. Not a HIK problem? Think about your statement for a while.
it is not a hik problem. not at all. it's the buyers problem.
people sourced hik for the price, not for their chinese food ... hik was answering a market demand driven by buyers in the west.
plenty of alternatives out there, people choose where and what to buy.
I think it’s a buyer problem and a Hik problem. You can’t absolve the criminal because the victim fell for it. Low bid bullshit fosters these opportunities, if it’s too good to be true it’s not true. But let’s not forget Hik did bad things here, I frankly don’t understand how anyone could still be selling it. Certainly not someone here blaming the buyer.
No sir, this is an Aventura problem. Hik may have been complicit by agreeing to obsfucate details that it was made in China (and should be investigated if found to be true), but ultimately this was Aventura as the manufacturer of record claiming their products were "Made in USA".
Fascinating how many people hit "disagree" on your post.
What you stated is 100% correct. If you voted 'disagree', you're clearly not paying attention.
Added: here is a 30-minute video of the DoJ announcement:
SIA provided us the following statement in request to our inquiry:
The Security Industry Association finds today’s charges issued by the U.S. District Court, Eastern District of New York, against Aventura Technologies and members of its management team to be very serious, and if true, would represent business practices that SIA does not condone. The SIA Board of Directors has begun to review these charges and the status of Aventura’s membership in SIA. SIA strongly encourages its members to operate ethically and comply with all U.S. laws and regulations. SIA also continues to fully support federal government efforts to strengthen the integrity of our nation’s supply chain.
Reading through the materials, Hikvision was clearly aware that Aventura was representing Hikvision products as Made in USA, and as being sold to US Government entities.
I would wager that certain high-level Hikvision USA employees are booking flights to China, or minimally, Canada.
This is likely not the end of the arrests in this case.
If the camera can be seen/identified on HikVision's SADP, or Dahua's ConfigTool it should not be on a government network. I am just curious how was Aventura able to keep this scheme going for so long? It literally takes only 30 seconds to check the OUI of a MAC Address. It doesn't sound like these guys were smart enough to buy their own block of OUIs.
WireShark OUI Lookup Tool:
| 11/08/19 12:03am
If you can see it via SADP and/or it has has Hik OID, then it is most likely a Hikvision camera. However, all that can be altered, and it looks like there was work requested by Aventura to suppress the ability to identify the software/camera as a Hikvision device.
It doesn't sound like these guys were smart enough to buy their own block of OUIs.
They had A8:75:E2 registered to them, and in use on at least some of their devices (I would suspect all of their devices).
Do you think if they bought their own block of OUI's they would have never been caught?
They actually had SADP installed on the network of an implementation they did. Even if OUI and SADP don't work, their exploits will :-)
Very glad to see this happening, hope these guys get charged with treason.
This reminds me a bit of the Audi emissions scandal. There is zero chance you get away with this long term.
Update: the post has been significantly re-written to incorporate the recorded conference and the 56-page complaint.
We have obviously not covered every aspect (e.g., there is the yacht and lots of other details). Some of these have already been discussed in the comments and happy to discuss more later. Obviously, we will be reporting more on this in the days and weeks to come.
Note: the fake 'Made In the USA' claim for Hikvision products is not new, e.g., in 2016, we covered how various Hikvision products listed in the US GSA were declared as being 'Made In the USA':
Those listers were not Aventura but other companies as the screencaps above show.
For a long time, we wondered what GSA was doing (or more specifically not). Evidently, today is a signal that things are being done.
First mention of Aventura on IPVM - from the Best and Worst ASIS 2013 IPVM show report:
The H.265 Exhibit
We only found one company exhibiting surveillance products using H.265 - Aventura.
The two cameras at the top of the display are using H.265. The image below is 3MP/20fps/1mbps.
Rival manufacturers mainly dismissed the company, because of its less well known brand, skepticism of the implementation and lack of 3rd party support. However, if Aventura can deliver on this, and they say they are shipping very soon, they will have the last laugh, as interest in H.265 is very high, as shown by our traffic stats over the last 6 months.
Aventura was very focused on Goverment projects; had bumped heads with them on VA projects in the past. It would be very interesting to know how many of those projects will have to be ripped out and replaced. Just the financial liability on that alone has to be enormous.
Few smaller updates:
SIA deleted its new member profile of Aventura, which was posted in December 2017 and still live as of Tuesday. Here is an archived version.
In the profile, SIA described Aventura as having "a strong history as an innovative manufacturer of hardware and software products and peripheral solutions for government, military and enterprise. "
Also, a journalist tweeted out this photo of FBI agents near two boats parked at the Aventura office:
Unclear who the boats belongs to, but I just thought that was interesting given the IPVM discussion last year about bosses parking their boats in the office lot.... the two boats can also be seen on Google Maps:
Those boats are, of course, tiny compared to the "Cabassos’ 70-foot luxury yacht" the FBI said they seized.
UPDATE: on the deletion of Aventura's profile, SIA tells IPVM
We have temporarily unpublished the profile while the Board review’s Aventura’s membership status.
Searching the internet is not hard. Check the page footer.
Gallery – Luxury Yacht Charters
What’s On Board – Luxury Yacht Charters 69.5Feet got to be close to 70
Do not know Alan Schwartz, but his LinkedIn title seems to be an admission, no?
"Lead Recreator"?
Being listed in the indictment and all! :))
Rejoice not when thine enemy falleth, and let not thine heart be glad when he stumbleth:
Lest the Lord see it, and it displease him, and he turn away his wrath from him.
your gloating at their demise are a little over the top for me. these comments have little to contribute to the discussion.
I'm just sayin
Using The Bible in response to Hikvision may seem appropriate but remember The PRCs views on Christianity. Christianity has always been illegal but ignored until recently. Two Christian Churches have been burned down. Christian Churches must have video and audio systems installed so the PRC can review their sermons. It is now illegal to take a child under the age of 13 to a church service. There is a reward for turning in your neighbor for hosting a church service in their house. The sale of Bibles is now prohibited in China. The PRC seems to fear Christianity. One could make the argument that buying Hikvision helps fund the elimination of Christianity in China since Hikvision and the PRC are one.
I don't rejoice in this. Good innocent people have lost their jobs. I saw some poor guy just started there 2 weeks ago. But if Communism fails in China it will fail from the businesses that fund it. The people and Christians in China deserve a better life.
I agree
in fact, if folks were willing to have a civil discussion, I think there is room for a separate topic on religion / morality/ and being an integrator.
For example, How does ones personal world view and Christian / western values apply to an entire nation that doesn’t hold those views?
It is easy to quote scripture or any other holy book but those are not a common denominator.
He also worked for Speco and Everfocus... KT&C appears to be a Korean company with a US presence. Never heard of it. Guy looks to be in his 70's, Hard to believe he had a 50+ year career before turning criminal. Just sayin.
11/08/19 05:05pm
Although not near as severe as saying that your products are Made in USA, Im curious if this case will have any momentum of charging other companies who explicityly and fraudulently claim that they are a CCTV manufacturer when they are just bringing in products from overseas manufacturers?
who explicityly and fraudulently claim that they are a CCTV manufacturer when they are just bringing in products from overseas manufacturers?
Agreed and take it further, do companies now need to explicitly declare they are selling Hikvision products if they sell it under their own brand? From the US Attorney's presentation, it's pretty clear that they found the hiding the true identity of the products to be deceptive and Hikvision et al PRC products to be security risks.
Sean, I know you have been up front about your OEMing when asked but do you think this will make you more proactive about disclosing it up front, e.g., on your website? Would Hikvision allow that (since they do not want OEMs generally to disclose the source)?
| 11/08/19 06:34pm
We aren't allowed to explicitly put on our website "Hey, these are Hikvision products". Personally speaking, I wish we could publically advertise that our products are Hikvision but just unbranded version. I think its silly that we can't and I alluded to this here.
But we are always upfront about it when asked in our communications (email, phone, social media, etc)
As far as general OEM'ing and branding products across the industry. I dont think it should be required for a company to say "Hey here is our brand, but this is who manufacturers it" blatantly on their website. Building a brand that is manufactured by another company is fairly normal across many industries. But for one to say they are a manufacturer but they really arent, that is where deception comes in and in my opinion is what the US Attorney was alluding to.
Here is my question:
Have we 100% confirmed that the products being imported with already applied "Made In USA" stickers were indeed Hikvision? The only reason I question it is because no matter what you think about them, I honestly think they would be much smarter to do something like that. You can call them what you want, but "dumb" is not something I would call them.
But if they were doing that, wow, just really dumb.
already applied "Made In USA" stickers were indeed Hikvision?
From the complaint, that was Manufacturer-7 and Hikvision is Manufacturer-1 so there is no evidence in the complaint that Hikvision shipped with 'Made in USA' stickers.
The problem, though, is that the complaint is not simply about those stickers. The complaint calls out as fraudulent the commonplace practice of covering up the true manufacturer, excerpt:
AVENTURA, have conspired with PRC-based manufacturers of security and surveillance equipment and others, to defraud AVENTURA’s customers, including agencies and contractors of the U.S. government, by falsely claiming that AVENTURA manufactured its own products,
As you say above, it is Hikvision's fundamental business practice when OEMing to cover up who the true manufacturer is. But the US government is obviously very concerned that these products are being misrepresented as such.
Sean, raids and arrests change the level of risk for Hikvision and China OEMing generally.
| 11/08/19 07:38pm
If Hikvision was intentionally aiding in Aventura's practice of telling people that Aventura was a manufacturer, then that is wrong.
And if Hikvision was aiding Aventura in anything to make it look like the products were made in USA, that is really wrong!
But if all Hikvision was doing was essentially branding every aspect of the equipment to apply to Aventura's brand, then I dont think they deserve to be blamed at all in this case. As said, thats common across many industries, not just CCTV. Its not fair to blame Hikvision if this is indeed the case. If you are saying that it is fair to blame Hikvision in this case, then there are many other brands right now committing fraud, some that are very well respected.
To be honest, I'm a little confused as to why you chose to use "Hikvision" in the headline without knowing the full implications of Hikvisions involvement, and chose not mention anything about Aventura. Its like saying "Smith and Wesson gun used to kill many in mass shooting"
Again, I will say, that if Hikvision is to blame for anything in this case, then they deserve all the negative attention, but Im not so sure we have established that yet? Maybe you know something I dont?
Hi Sean,
I have personally worked with an Aventura installation and I have confirmed that all cameras were Hikvision while carrying the brand Aventura. I have confirmed this through many means, mainly housings are identical and the software to configure and lookup cameras was SADP. The main proof was that all Hikvision exploits could be successfully executed on all the Aventura cameras. This was some years ago and I don't recall if the cameras had the label "Made in the USA" on them but what I know for 100% sure is that the cameras are Hikvision. At least the batch in that particular installation. What I do know is that they always said that their equipment is made in the USA.
As far as general OEM'ing and branding products across the industry. I dont think it should be required for a company to say "Hey here is our brand, but this is who manufacturers it" blatantly on their website.
I agree with this. I get that the company is Hikvision in this case and all that surrounds this, but many VMS servers are rebranded Dell servers or Supermicro servers. The companies sell them as their own and provide support for them. It's just a way to create an end to end system.
Outside the surveillance industry, this happens with major TV brands that create the illusion they are a manufacture. I believe the gray area is if the company engineered the products or not. Apple does contract manufacturing and I don't believe they own any manufacturing equipment, but they engineer their products and kind of support them.
In the audio industry, Danley "manufacturer's" their loudspeakers, but rebrands their amplifiers. They were using Crest audio, but have since moved to Linea Amplifiers. I know the wooden loudspeakers are manufactured in the US and are built well and the company that makes them for Danley does this for many other companies. They are all engineered by Danley though.
A lot of loudspeaker companies rebrand Xilica audio processors. They do this and then often provide their custom DSP settings applicable to their particular loudspeaker.
All of these companies do this for various reasons. A lot of it is to create the end to end experience and sometimes provide more money for the dealer by hiding the name of the original manufacture. When I have spoken with many of the companies, they don't really hide who makes the product. I just don't feel it needs to be stated on every website unless we are trying to expose companies who may be trying to simply create an end to end solution for the integrator to pass on the the customer.
In this case, there was clear deception from Aventura in many ways to make a profit. I believe they wanted to go further then most to hide where they got their product due to who they were selling to and the fact they heavily published that their products were made in the USA. If they also used WBE to further get contracts without the primary decision maker being a woman, this is also not good. I believe some of the comments in this discussion stem from just not liking Hikvision. I don't agree with everything related to Hikvision, but I believe they play a small part of this or perhaps a small group of Hikvision employees play a small part. I would feel differently if it was Hikvision who came up with the scheme of deception and used Aventura to carry it out. Based on Jack Cabasso's criminal history, I would presume this was all Cabasso's plan.
Generally, it's not hard to reverse image search products as someone mentioned in this discussion. Google generally is pretty good at it. However, generally just a name change and a product color change is all that is needed to convince most consumers. If the alarm company installed cameras with their name on it, they might tell they are company x's brand cameras. They don't get out the config tool and do a lot of work to find out who actually made it. I do this on products where I don't believe they actually made the product for various reasons. Sometimes this reason is that I don't believe a company could go from a few simple products to hundreds in a very short time period.
Other times I don't like when products rebrand for various reasons. Think Network Optix. Blue is a nice color and is easy on my eyes. Orange...not so much.
Apple does contract manufacturing and I don't believe they own any manufacturing equipment, but they engineer their products and kind of support them.
Kyle, Apple controls and does the software / firmware development, which from a cybersecurity standpoint is the key element.
Contrast to an IP camera OEM like Honeywell and they have no idea what software/firmware is inside. If there is a reported vulnerability they have to wait until Dahua does something, literally.
When I have spoken with many of the companies, they don't really hide who makes the product.
Sure, some people face to face admit, some don't. I have been lied to my face numerous times by OEMs and in a minority of instances told the truth. But even if everyone told the truth in person that's a problem for end users who would somehow then need to get a hold of an honest company employee.
Kyle, that said, I get that there are cases where OEMing is mundane but as more and more devices become IoT and online, there is increasing risk of hidden OEMing / relabeling. Ironically, if Hikvision / Aventura were selling analog cameras, this would not have been an issue....
I believe they play a small part of this or perhaps a small group of Hikvision employees play a small part. I would feel differently if it was Hikvision who came up with the scheme of deception and used Aventura to carry it out
There is a broader 'scheme of deception' going on with Hikvision, various China manufacturers and their US partners - that of supporting those US partners to pretend to be their own manufacturers, here is an example that came up recently:
Maybe all the government does is crackdown on Aventura or maybe Aventura is the beginning of a broader crackdown. I don't know.
The complaint though makes it clear the US government has obtained various internal correspondence from Hikvision and other China manufacturers. Given everything that is going on with the ban and sanctions, it seems entirely plausible that they are currentlly investigating those PRC manufacturers further. Yes/no?
In reference to the Backstreet Surveillance, this was brought up because one of my clients had contacted me to install a camera system at his home and all the cameras were already custom painted to match his house. The only issue...the installer was nowhere to be found. He wanted me to finish the install. When I walked in his house, I saw all this Backstreet Surveillance that I had never heard of, thus we started investigating the company and that map came up. For me to install it was more than he wanted to pay at the moment so he was going to hold off. Instead, I installed two Nest Hello doorbell cameras integrated with his intercom system for the chime and an indoor camera. He wants to add one more to the corner of the house. This was supposed to be a short term solution, but it's been almost a year.
Yes, I'm fully on-board with the large issues surrounding security and the delay in patching rebranded units with updated firmware. When Robert was with Savvytech, he made it much easier to get the proper firmware for particular cameras. Now that he isn't there, ENS has been terrible at communication regarding updated firmware. Because of this, CVI cameras are a relatively safe bet, but anything else, I'm leaning toward the original manufacturer for hardware. At least this way it's easier to get the correct firmware.
it seems entirely plausible that they are currentlly investigating those PRC manufacturers further. Yes/no?
Yes, I don't doubt they will be investigated and I don't feel that companies should really be rebranding cameras without changing anything. If all these companies bought cameras and used software/firmware completely developed in house, I would say they did something positive and could mostly call it their camera at that point. I don't really see evidence of this happening. SnapAV claims they have custom firmware, but I didn't really see anything different but a splash page telling me to only use Internet Explorer when opening with Chrome.
Is IC Realtime any different? They seem to still be rebranding Dahua cameras. I get that they offer some value add, but it looks mostly like a Dahua portfolio offering "...residential, commercial, government, and military security markets."
I would also agree that if Honeywell has a camera in their product line that they didn't actually manufacture, a typical end user isn't going to know that nor recognize it just by the body style. If they later find out about the truth due to an exploit that has no immediate patch, that doesn't go over too well. At that point the end user would feel a little bit deceived. I guess we have come to a point where this happens so often that we often don't see it from the customer's point of view even when we don't like the practice ourselves. I know I've always tried to explain the origin of the product and be upfront with my customers.
So basically we are saying that there will be no more OEM in the industry? This is ilegal now? As I understand OEM has been very common practice in our industry and many others, china/india/taiwan/vietnam,etc.. produce and put you're brand in everything you want it, of course is you're choice to disclose where is the product made, you can figure it out if you know the industry, but almost nobody disclose the real factory, is against the OEM concept. The problem as I see it is when you lie and stands that a product made in china is made in the USA with a label on it, this is unethical and should be penalized, worst if you do that to the US goverment when an explicit ban to China made products to US government facilities are in place. Any beginner in our industry could tell you that Aventura is an OEM, not a manufacturer!! and by the way I would like to know where are the made in USA CCTV manufacturers ( Hardware not software ) I Like to buy them and promote them!, I only know one manufacturer that make cameras to capture videos in hunting areas (very good by the way).
I added a new section upfront with a key section from the complaint:
Conspired with PRC Manufacturers
The complaint alleges that Aventura 'conspired' with PRC manufacturers to falsely claim Aventura made its own products:
Dozens of video surveillance companies regularly and falsely claim to manufacturer their own products, backed by the US Security Industry Association, and this raises concerns for much of the industry.
If you are a China manufacturer or a US OEM right now, I would be very, very concerned as this practice is rampant and wrong.
|Standing ovation happening| (you just can't hear it!)
Totally agree John, I can’t help but think they went after the small fish here. They will never go after Honeywell, their attorney’s and lobbyists are too connected. Plus it would highly impact too many government projects.
They will never go after Honeywell, their attorney’s and lobbyists are too connected. Plus it would highly impact too many government projects.
isn't that the whole point? i.e. govt installations with white label Chinese spy cameras?
how can they possibly go after Aventura/Hik without eventually also going after Honeywell/Hik?
I don't know what's next. This investigation has been going on for a long time - a year, 2 years, not clear. That begs the question of what other investigations are ongoing that are not public yet.
It depends on where the government look and what they find. Are there emails from Honeywell or UTC or Tyco that say similar things to what Aventura did? There could be. We all know in the industry that hiding who your OEMs are is standard procedure when it comes to marketing and public representation (even if you personally have a friend on the inside who will tell you the truth).
From the US attorney's presentation, the government clearly is concerned about knowing the true source of the products that are being deployed. And, if that is the case, whether it is arrests or not, something needs to be done to deal with dozens of companies who have for a decade passed off Dahua, Hikvision and other China products as their own.
| 11/11/19 04:23pm
I wouldn’t be so quick to think that Honeywell can insulate themselves with lawyers and lobbyists. I think that the feds took down Aventura because it was salacious given the level of greed and deception that was glaringly easy to see.
What could happen next is that they use the Aventura case as a springboard to level complaints on the less salacious, yet likely equally harmful to national security, companies like Honeywell.
If I was a complicit employee at a firm like Honeywell, I would be getting first in line with my attorney trying my best to get a “get out of jail free” card. I would not want to be the last in line.
(insert MJ eating popcorn meme)
From last year: Why Do OEMs Lie? (Looking At You ENS, LTS, IC Realtime)
A few members of IPVM were pretty diligent about calling this Aventura BS out. Aventura went to ridiculous lengths to cover up the source, even offering tours of their "factory". This one will be interesting to watch unfold and undoubtedly will ripple throughout the industry.
Is it me or am I seeing the trade rags leaving Hikvision out of the articles? I've read several and there is no mention of Hikvision just a PRC manufacturer.
Well, the complaint does not name Hikvision explicitly, so the easy path is just to run it as Aventura and unnamed PRC companies.
However, we and the WSJ both obviously investigated this, related WSJ: Prosecutors Charge N.Y. Firm With Selling Banned Chinese Gear to U.S. Military. One notable point the WSJ made was that the body cameras Aventura sold to the Air Force were from Hikvision. [Update: the WSJ may be wrong as #18 below points out an alternative supplier]
Indeed, the complaint says that Hikvision's logo was in the bodycameras that were going to the US Air Force in 2018:
The trade magazines will argue since the complaint does not name Hikvision that Hikvision is at best ancillary to this story. However, looking at the government's motivation here (protecting national security from PRC manufacturers), what's driving this issue is that Aventura did this with Hikvision and other China manufacturers.
What happens when the end user calls for support? Imagine you have a techie end user who knows how to find the OEM tied to the MAC address. Was HIK knowingly listing the equipment and rerouting tech calls? I wonder how deep the deception went.
HIK goes to great lengths to verify grey label equipment during tech support calls so perhaps this is SOP for them
Here how I imagine it:
- call comes in
- verify model and serial number
- look up what to do in playbook. Ah this is “made in USA equipment”
/ customer support agent puts on midwestern accent .../
We have been looking for some office space in that area. Looks like we have a vacancy.
Update: the US Attorney says that Aventura equipment is in the process of 'all being removed and remediated'.
this story has exploded all over the media - with numerous alarmist headlines that may or may not represent the actual content of the words contained within the story.
but WOW! this is a really, really large deal.
American Greed episode next season for sure.
This is going on where I am, on a smaller scale. This competitor has grown over the past few years. It's pretty messed up that we can lose business to our dishonest competitors that are on GSA schedule, State Contract & selling their, Dahua, Hikvision & Geovision, saying THEY are the manufactured in the USA. I'd like to get paid damages to my company for these other companies being awarded federal or Municipal projects. Having them arrested and shutdown would be great too. Being on a State contract means they don't have to go out to bid. They can just purchase what they want from an approved vendor. They should be really nervous right now. Its not very hard to prove they have been misrepresenting themselves and being dishonest to their customers. All that they dishonestly worked for could be gone. What would be the best way to go after them? And who's gonna take action?
It's going on everywhere. They've bent to cost curve down so sharply (The race to the bottom) that the client class has come to expect surveillance systems cost next to nothing. Since I do not deal in PRC equipment at all, and never have, it becomes a real chore to justify my pricing. Calling their equipment American-Made is just twisting the knife, especially when the end user can't tell the difference.
What would be the best way to go after them? And who's gonna take action?
We can help. I emailed you directly.
I would have no problem turning in every one of these cheaters/lawbreakers to the Feds. This is fraud and worse.
Can former employees who also knew of the deception be located and charged? It would seem that there were probably more than a few employees who were aware of this illegal activity, and just because they aren't working at Aventura any longer .... does this absolve them of any wrongdoing?
This is a game changer for the industry. No longer can a company deny the fact there cameras (or any other product) are actually OEM'd from another company. (Regardless of company of origin). Is anyone concerned about non PRC OEM'd cameras? I think legally you have to ask the question and the manufacture has to answer honestly or face the consequences. (Fraud)
Update: The indictment was filed on December 9, 2019:
Most of the points made look to be the same from an initial scan, though more details have been added about specific accounts frozen.
Notable, the government continues to declare Hikvision as owned by the PRC government:
Update: Jack Cabasso was arraigned and plead not guilty on all counts, excerpt below:
His attorney is Albert Dayan who has a long list of federal indictments being dismissed.
Another court filing says Cabasso is engaged in plea negotiations:
Are you telling us these cheats are getting away with this and allowed to open back up? Unbelievable!!!! So there are other companies lying about manufacturing in the USA, what happens to them now? It's bad enough that unlicensed companies are selling and installing camera systems in a state that requires a license. Even worse is a so-called security company posing to manufacture their own products, sells, installs their rubber-stamped overseas parts claiming proudly to be made in the USA. Google image the products they are showing on the GSA list. Clearly they are not. What's their loophole?
From the Detention Memorandum after charges were filed... pointing out that Cabasso should either be detained until trial, or at least have some kind of conditions applied to bail if he isn't confined:
The guy has a very interesting history.... but even with that, how could they possibly still be in operation?
Update: The criminal case is still ongoing with this month's letters being filed showing data seized from Aventura's office and obtained from Microsoft via search warrant.
USA_v_Cabasso_et_al__nyedce-19-00582__0160.0
There is a protective order in place filed in May, restricting access to much of the information in the trial.
Update: While the criminal case continues, the yacht has become an issue.
A letter sent by the counsel for Dr. Eric Weinstein claims that the yacht is 50% owned by Weinstein via a holding company that Weinstein and the Aventuras split ownership of. Public records of this holding company show Cabasso and Weinstein as officers of the company.
The letter says that:
Dr. Weinstein and IShine are innocent owners of the Seized Yacht. 1 Dr. Weinstein initially invested approximately $475,000 into the Seized Yacht. He paid $125,000 upfront and took a loan for the remaining $350,000 that he pays back to the lending bank at a rate of $5,000 per month. He is continuing to make these loan payments, even though Ms. Cabasso is not chipping in, and even though the yacht has been seized....
Dr. Weinstein estimates that more than $165,000 worth of repair work was needed when the boat was seized in 2019. Upon information and belief, the Seized Yacht has only continued to deteriorate since its seizure, causing further damage to the fiberglass, decking, plumbing, electric equipment, battery, and engine.
They are "requesting that the Court order an immediate interlocutory sale of the Seized Yacht over Ms. Cabasso’s objections."
Frances Cabasso's attorney has responded, objecting to the request to sell the yacht. While they acknowledge the 50/50 ownership, they dispute the claims of the yacht's deterioration and emphasize that Cabasso 'retains her presumption of innocence in the criminal case.'
The US government has now moved to order the sale of the yacht. The government explains:
As of December 31, 2020, approximately $56,625.85 in maintenance and storage costs relating to the Yacht have accrued. These expenses continue to accrue and will continue to accrue until there is a disposition of this asset. Further, in addition to these reoccurring expenses, in November 2019, around the time the Yacht was seized, the United States Marshals Service (“USMS”) was informed that the Yacht was estimated to have a value of approximately $649,000. An appraisal received by the USMS, dated June 23, 2020, estimated the value of the Yacht to be approximately $625,000. In short, over an approximate eight month period, it appears that the Yacht has decreased $24,000 in value while the maintenance and storage costs are continuing to be incurred.
In these circumstances where the asset is depreciating and large expenses are continuing to be incurred with respect to the storage and maintenance of the asset, F. R. Crim. P. Rule 32.2(b)(7) and Supplemental Rule G(7)(b) authorize the government, pursuant to a court order, to proceed with an interlocutory sale in order to prevent further dissipation and to preserve the value of the forfeitable Yacht pending resolution of the criminal proceedings.
The criminal case continues.
Frances Cabasso filed a 12-page document opposing the sale of the yacht, excerpt:
Given the seriousness of these charges, this is an odd element to be debating over whether to sell a yacht.
The Court has denied the government's request to sell the yacht, rationale was lack of reliable appraisal on the yacht's value:
to make such a determination the Court needs reliable information from persons with the requisite expertise to voice an opinion as to Yacht's market value at the beginning and at the end of the specific period....
what are the expert credentials, if any, of the person who "informed" the USMS of the $649,000 figure? Absent that information, the number provided is essentially meaningless. The same may be said of the $625,000 figure, as well as the $24,000....
The court told the Government if it moves again for this, the goverment "should include copies of any referenced appraisals along with the credentials of the preparers."
The criminal case continues.
Update: USA_v_Cabasso_et_al__nyedce-19-00582__0169.0, new discovery has been made for the case, including Army contracts, a Department of Commerce investigation, Department of Interior, Department of State, Air Force, Treasury, etc.
They are under a Protective Order so are not being released, at least for now.
Update: discovery continues and one of the defense attorneys says it will take them months to review the data:
New government filing alleges defendant moves hundreds of thousands of dollars that "appear to have been intended to evade detection":
