An empirical examination of product counterfeiting crime impacting the U.S. military

Abstract

Counterfeit parts in the U.S. Department of Defense (DOD) supply chain threaten national security by compromising critical military operations and placing the lives of military service members at risk. With the goal of illustrating the nature of the risk as it relates to types of counterfeit parts, how they entered the supply chain, and were identified and processed through the criminal justice system, we assemble and analyze open-source information on criminal schemes involving counterfeits in the DOD supply chain. We utilize the Product Counterfeiting Database (PCD) to capture every indicted scheme linked to the DOD and describe characteristics of the schemes, offenders, and victims. These data provide empirical insights into the counterfeiting of parts and equipment in the DOD supply chain. We conclude with an overview of key issues to consider when weighing opportunities for product counterfeiting as well as implications for policy and practice.

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Fig. 1

Notes

  1. 1.

    In one case, a plea agreement was reached to drop the charges against the spouse of the primary offender in the scheme, while in another the former spouse of the primary offender was diverted before trial without conviction pending the successful completion of probation terms. In a third case, an offender died prior to the resolution of the case.

  2. 2.

    In one case, the offenders plead guilty in lieu of being indicted and were sentenced to probation, community service, and restitution, along with an order not to engage in further sales of parts to the government for a defined period.

  3. 3.

    The length of these investigations may be related to product type, as schemes involving engine parts (and to a lesser extent electrical circuits) involved longer investigations than those for computer networking hardware, although this may be because both latter schemes were investigated by the same federal task force (Operation Network Raider). The relationship was not statistically significant at the 0.05 significance level (χ2 = 5.36, p = .07) but the p-value was less than 0.10, suggesting weak evidence against the null hypothesis that there is no relationship between investigation length and the type of counterfeit product.

  4. 4.

    Two of the 31 offenders plead guilty after waiving the right to indictment, but were included in the study, as the decision was part of an agreement between the prosecutor and the offenders.

  5. 5.

    As noted above, one offender had charges against her dropped because of a guilty plea by her spouse, another entered pre-trial diversion, and a third died of a drug overdose before trial.

  6. 6.

    The two offenders who waived the right to indictment received three years of probation, along with community service and restitution. A third offender was sentenced to five years of probation, while a fourth was sentenced to two years of probation (six months of which is under house arrest).

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Acknowledgements

The authors would like to thank Ross S. Militz and Kaitlyn A. McCullough for their research assistance on this project.

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Correspondence to Brandon A. Sullivan.

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The authors did not receive any funding for this study.

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This article does not contain any studies with human participants performed by any of the authors.

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Brandon A. Sullivan declares he has no conflict of interest. Jeremy M. Wilson declares he has no conflict of interest.

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Sullivan, B.A., Wilson, J.M. An empirical examination of product counterfeiting crime impacting the U.S. military. Trends Organ Crim 20, 316–337 (2017). https://doi.org/10.1007/s12117-017-9306-7

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Keywords

  • Counterfeit
  • Military
  • Department of Defense
  • Supply chain
  • National security