Tytronix/Epic (Peter Picone) supply chain risk

Recently an excerpt of sales transactions from the Peter Picone, Tytronix/Epic court case was released to enable Tytronix/Epic customers to check their inventories for counterfeit ICs. There are 826 transactions between 2007 and 2012 documented where goods purchased from China by Tytronix/Epic and were sold to Independent Distributors. Although Global IC Trading Group never purchased any material from Tytronix and/or Epic we completed an audit of our transaction history against the list to determine if any of the transactions could have impacted our supply chain. We are please to report there is no impact. PeterPicone

History on the Peter Picone, Tytronix/Epic Case
On June 25, 2013, an indictment was returned by a federal grand jury for Peter Picone, 40, of Methuen, Mass., who has been charged with importing counterfeit semiconductors from China for sale in the United States.

The indictment charges that from February 2007 through April 2012, Picone, through two companies he owned and operated, Tytronix Inc. and Epic International Electronics, purchased counterfeit semiconductors from sources in Hong Kong and China. According to the indictment, Picone made false representations about the semiconductors and sold them to customers throughout the United States, including companies believed by Picone to be defense contractors in Connecticut and Florida. Certain semiconductors sold by Picone were intended for use on nuclear submarines.

On June 3, 2014, Picone plead guilty before U.S. Magistrate Judge Donna Martinez of the District of Connecticut to an indictment charging him with conspiracy to traffic in counterfeit military goods. As part of a plea agreement with the government, Picone agreed to a forfeiture money judgment of $70,050 and the forfeiture of 12,960 counterfeit ICs seized during the execution of a search warrant at his business and residence. Sentencing was set for Aug. 22, 2014.

According to court filings, from 2007 through 2012, Picone conspired with his suppliers in China and Hong Kong to sell millions of dollars’ worth of ICs bearing the counterfeit marks of approximately 35 major electronics manufacturers, including Motorola, Xilinx and National Semiconductor. Picone sold counterfeit ICs to contractors knowing that they would be supplied to the United States Navy for use in nuclear submarines.
Tytronix/Epic total sales were approximately $4 million dollars of which the government asserts Peter Picone hid the Chinese origin on approximately $1.2 million.

Many of Picone’s customers specified in their orders that they would not accept anything but new ICs that were not from China, but Picone told them that the ICs were new and manufactured in Europe. Testing by the Navy and one of its contractors revealed that in fact the ICs purchased from Picone had been resurfaced to change the date code and to affix counterfeit marks, all in order to hide their true pedigree. Federal agents searched Picone’s business and residence on April 24, 2012, and recovered 12,960 counterfeit ICs.
For more information, visit the following websites:

http://www.justice.gov/opa/pr/massachusetts-man-charged-selling-counterfeit-semiconductors-intended-use-nuclear-submarines

http://www.justice.gov/opa/pr/massachusetts-man-pleads-guilty-importing-and-selling-counterfeit-intergrated-circuits-china

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