Executive agencies duped into buying banned Chinese products, US says
The owner of a technology company has duped New Jersey’s public safety and law enforcement agencies by spending at least $35 million, including $15 million in federal funding earmarked for Covid-19 response and other uses, on banned Chinese surveillance and security equipment, according to a complaint unsealed this week.
According to the complaint, the company’s owner and CEO, Tamer Zakhary, “fraudulently misrepresented” the equipment he sold, such as automatic license plate readers and surveillance cameras, and told New Jersey agencies that the products complied to US regulations. Mr. Zakhary, 49, was charged with bank fraud and making false statements to federal agents.
According to prosecutors, Mr. Zakhary’s scheme began around August 2019 and lasted until December 2022. During that time, he sold equipment to police departments, sheriff’s offices, district attorneys and townships through his New Jersey company, listed online as Package language.
In one case, Mr. Zakhary emailed a manufacturer — whose technology the Federal Communications Commission had banned from being imported, sold or operated in the United States — asking it to produce cameras with a different color and logo to reflect the identity of to hide the maker. to the complaint. That exchange, federal prosecutors said, showed that Mr. Zakhary knew he was purchasing banned technology and “attempted to conceal that fact.”
The complaint, filed by the United States Attorney for the District of New Jersey, did not identify the company whose equipment Mr. Zakhary allegedly sold, but prosecutors said that was the case. on a list of Technology companies are banned under a 2018 federal law aimed at addressing concerns that “foreign intelligence actors,” particularly Chinese companies, were trying to infiltrate the country through technology.
The charges against Mr. Zakhary and the revelation that law enforcement agencies in New Jersey had purchased technology that the federal government deemed a national security risk come amid an escalating technology war between the United States and China.
In recent years, lawmakers have called for investigations into TikTok, China’s video app, and urged that phone and internet equipment owned by Chinese companies be removed from all corners of the United States. In August, President Biden signed an executive order banning new US investments in key Chinese technology industries.
China has responded with its own restrictions. In May, the Chinese government banned companies that process critical information from purchasing microchips made by Boise, Idaho-based Micron.
According to 404 Mediaa tech publication that first reported the federal complaint against Mr. Zakhary, items sold to New Jersey agencies included cameras manufactured by Dahua Technology, which the federal government has said is involved in human rights abuses.
At one point, when employees of an agency that bought from Mr. Zakhary worried that the equipment came from a banned company, Mr. Zakhary reassured them by saying that Immigration and Customs Enforcement and the Bureau of Alcohol, Tobacco , Firearms and Explosives used the same equipment, according to the complaint.
Mr. Zakhary admitted in a later interview with federal agents that no federal agency had purchased cameras and equipment from him, prosecutors said.
Not only was Mr. Zakhary aware that he was selling prohibited equipment, according to the complaint, but he also, in at least one instance, attempted to use that knowledge as leverage in price negotiations.
In March 2020, an employee of the banned technology manufacturer emailed Mr. Zakhary stating that, to their knowledge, federal funds could not be used to purchase the company’s products. Mr. Zakhary brushed off the concerns, saying he had been selling the company’s cameras “for many years.”
According to the complaint, Mr. Zakhary requested the company’s best price offer the following month.
“One thing the competition has against your company is that they are not blacklisted by the US government,” he wrote in an email to a company representative.
The wire fraud charges against Mr. Zakhary each carry a maximum penalty of 20 years in prison, and the false statements charge carries a maximum penalty of five years in prison.