Fake Factories and False Flags: An $88 Million Reminder That ‘Made in USA’ Means What It Says

If those sound like hypotheticals, they are not. They are among the findings in United States v. Cabasso where the US District Court for the Eastern District of New York denied defendant Jack Cabasso’s motion to withdraw his guilty plea to conspiracy to commit mail and wire fraud under 18 U.S.C. § 1349. The case arose from Cabasso’s operation of Aventura Technologies, Inc., a Long Island, New York, company that sold approximately $88 million in security equipment, including networked cameras, body cameras, and turnstiles, to US government agencies, foreign governments, and private-sector customers. Aventura marketed itself as a “true ‘single-source’ manufacturer” that “proudly manufacture[d] in the U.S.A.”

It did not.

The Scheme

We have previously discussed how even well-intentioned origin claims can draw regulatory scrutiny and unpacked the growing federal focus on “Made in USA” enforcement. Cabasso takes that enforcement posture to its logical extreme. Aventura’s products were, in large part, imported from the People’s Republic of China (PRC). But the deception went far beyond mislabeling. According to the court’s opinion, Cabasso and his employees engaged in an elaborate, years-long effort to disguise the Chinese origin of Aventura’s products.

• PRC manufacturers printed “Made in the USA” labels and American flag logos directly onto Aventura-branded products before shipping them to the United States.

• Cabasso directed employees to scrub Chinese manufacturers’ initials from circuit boards and review firmware code for Chinese characters that could reveal the products’ true origin.

• When a Kuwaiti government contractor asked whether cameras were made at Aventura’s factory, Cabasso responded “yes” and attached a photograph of Aventura’s purported manufacturing facility. The photo was actually of a supplier’s factory in China.

• A Swedish reseller complained that a camera shipped with no trace of Aventura and appeared to be an identical Chinese product. Cabasso directed an employee to lie, claiming the units were “R&D units” mixed up on the production line.

• Cabasso sold PRC-made body cameras to the US Air Force under a Buy American contract, going so far as to have the PRC manufacturer upload the Air Force logo onto the cameras’ firmware. The cameras were later found to also contain logos of PRC police entities.

• When US Department of Energy (DOE) turnstiles shipped from China arrived at Oak Ridge National Laboratory with Chinese-language stickers, Cabasso directed an employee to falsely tell the DOE that the markings related to acrylic that Aventura “cuts, mounts and polishes” in New York. He later admitted that the entire item was made in China.

The Court’s Analysis

Cabasso pled guilty in December 2023 but moved to withdraw his plea 19 months later, claiming actual innocence, government coercion, ineffective assistance of counsel, and suppression of exculpatory evidence. The court rejected every argument and denied the motion.

Cabasso’s central defense was that Aventura’s products were “substantially transformed” in the United States and therefore complied with the Trade Agreements Act (TAA), which permits federal agencies to purchase products from non-designated countries if they have been substantially transformed into a new article of commerce in the United States. Cabasso argued that any origin representations governed by the TAA were accurate, and that he believed in good faith they were.

The court was unpersuaded. It held that Cabasso’s arguments “erroneously assume that the only potentially relevant representations made by Aventura concerned compliance with the TAA.” The evidence showed Aventura and Cabasso made specific, affirmative misrepresentations that went well beyond TAA compliance, including false claims that products were “manufactured” in the United States, “Made in the USA,” and produced at Aventura’s own facility. As the court put it, even assuming some transactions were TAA-compliant, that “would not immunize or excuse Defendant and Aventura from making blatant factual misrepresentations.”

Critically, the fraud was not limited to federal procurement. Cabasso admitted at his plea allocution that victims “included buyers of the private sector, agency of the U.S., and foreign governments.” The TAA does not govern private commercial transactions, a point Cabasso conceded.

What This Means for Companies

Cabasso is a stark reminder that “Made in USA” enforcement is not just a regulatory or civil matter; it can be a federal crime. As we have noted in discussing FTC enforcement actions and private class actions over origin claims, the legal landscape around country-of-origin representations continues to tighten. Cabasso shows that the US Department of Justice (DOJ) is willing to go further by bringing criminal fraud charges when origin misrepresentations are sufficiently egregious.

For companies sourcing components or finished goods from overseas, the key takeaways are:

1. TAA compliance is not a blanket defense. Even if a product qualifies as “substantially transformed” in the United States under the TAA, companies cannot make broader claims that the product is “Made in the USA” or “manufactured” domestically. These are distinct representations, and the latter carries its own legal requirements.

2. Exposure is not limited to government contracts. Cabasso’s fraud conviction rested on misrepresentations to private customers and foreign governments, not just federal procurement. Companies must ensure origin claims are accurate across all sales channels.

3. The details matter. Certificates of origin, marketing materials, trade show displays, product labels, and even email responses to customer inquiries can all form the basis of a fraud prosecution. Every customer-facing representation about where a product is made should be scrutinized.

4. Criminal risk is real. This case signals that the DOJ views country-of-origin fraud as worthy of criminal prosecution, not just administrative sanctions. Companies and their executives should treat origin compliance with the same seriousness as any other area of potential criminal exposure.

Companies with complex, multinational supply chains should review their origin claims, marketing materials, and internal compliance programs now before an inquiry begins.

[1] United States of America, v. Jack Cabasso, Def.., No. 19-CR-582 (JMA) (ARL), 2026 WL 2426389 (E.D.N.Y. Aug. 19, 2026).