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Man pleads guilty in counterfeit sub parts case

By WTOP Staff

DAVE COLLINS
Associated Press

HARTFORD, Conn. (AP) — A man who admitted sending counterfeit semiconductors to the U.S. Naval Submarine Base in Connecticut and other customers acknowledged Thursday the substandard parts could have put people’s lives in danger.

Peter Picone faces up to 46 months after pleading guilty to a single count of conspiracy to traffic in counterfeit military goods. Sentencing was set for Aug. 22 in federal court in Hartford.

“I made a big mistake,” Picone told Magistrate Judge Donna Martinez. “The outcome if they got through … would be horrible.”

Picone, 41, of Methuen, Massachusetts, and his companies, Tytronix Inc. and Epic International Electronics, sold $2.5 million worth of counterfeit semiconductors to numerous clients from February 2007 to December 2012, according to authorities.

Authorities said Picone imported thousands semiconductors from companies in China and Hong Kong that refurbished old ones and put counterfeit markings on them to make it appear they were made new by reputable companies including National Semiconductor Inc. and Motorola Inc. Most of the U.S. companies Picone sold to had requested new chips not made in China, authorities said.

Federal authorities say counterfeit semiconductor chips could contain malicious computer code or hidden “back doors” that would allow someone to disable systems, intercept communications and commit other computer network intrusions. They also say bogus chips can cause malfunctions and failures, as well as electrical shocks that can kill or injure people.

“Counterfeit electronic components pose a significant risk to our national security, the dependability of our weapons systems, and ultimately the safety of our warfighters,” said Craig Rupert, Special Agent in Charge of the Northeast Field Office of the Defense Criminal Investigative Service. “The failure of a single electronic component could leave our military vulnerable.”

In one order, Picone sent 100 counterfeit semiconductors to the submarine base in Groton in February 2012, knowing they were for a contract for a new submarine. The Navy tested the semiconductors before using them and discovered they were not new and had been manipulated to hide their origins. Picone made about $2,000 between that order and another for the base two months earlier, authorities said.

In another order in 2009, Picone sold 33 counterfeit semiconductors for $68,000 to a defense contractor who was going to send them to the Navy for use in the secondary propulsion system of an active-duty nuclear submarine. The defense contractor also tested the parts and determined they were bogus.

Officials with the Defense Department, Navy and Homeland Security Department investigated Picone’s case. They found evidence he wired nearly $1.8 million to companies in China and Hong Kong. At Picone’s home, they seized nearly 13,000 semiconductors bearing the counterfeit markings of at least 35 companies.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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