A New York company and seven of its current and former employees were charged Thursday in an alleged scheme to illegally import Chinese-made surveillance and security equipment, and then to sell it to U.S. government agencies, military branches and private customers under the false claim that the gear was American-made.The Chinese equipment sold by Aventura Technologies ended up on U.S. Navy ships and military bases among other places, and had cybersecurity vulnerabilities in many cases, according to authorities, who said the company obtained more than $20 million in federal contracts since 2010.Among those charged were Aventura’s entire senior management team, including its defacto owner and actual CEO Jack Cabasso, who has an extensive criminal record, officials said.Also charged was his wife, Frances Cabasso, the purported CEO of Aventura, who allegedly had no actual executive role in the company, which benefited from government contracts set aside for women-owned small businesses.All seven defendants were charged with unlawful importation and conspiracy to commit mail and wire fraud. The Cabassos additionally were charged with money laundering conspiracy, as they are accused of funneling off Aventura’s illegal profits through shell companies.Aventura, based in Commack, Long Island, was raided early Thursday by federal authorities. Agents seized boxes of documents and other evidence at the firm. They also seized $3 million and a 70-foot luxury yacht supposedly owned by Aventura but which is used by the Capabassos for pleasure cruising and which they rent out to others.The firm’s website describes the company as a security hardware and software manufacturer.”Because of misrepresentations made to the U.S. government, Aventura was paid tens of millions of dollars for Chinese manufactured surveillance systems that ended up on Army and Air Force bases, Department of Energy facilities, on Navy installations and even on U.S. aircraft carriers,” U.S. Attorney Richard Donaghue said in a press conference in Brooklyn, New York.Donaghuse said that Aventura claimed the equipment it imported from China was being manufactured in Commack, and slapped “Made in the USA” labels on the equipment as part of the scheme. Since 2010, the company received approximately 1,000 shipments of “sophisticated” electronic equipment from China, according to authorities.Prosecutors also allege that Aventura executives “conspired” with Chinese suppliers to “modify” the products to conceal the fact that they had been manufactured in China. This included modifying the markings on circuit boards and certain “identifiers” in software code, Donaghue said.The company has allegedly been engaged in importing and reselling the equipment for more than 13 years, Donaghue said. Some of the systems had “known vulnerabilities,” he said.Jack Cabasso was detained without bail after not having a proposed release agreement available Thursday. Prosecutors want him detained without bail until trial.His wife was released on $1 million bond.In a court filing, prosecutors said Jack Cabasso had “masterminded” the “international fraud conspiracy,” and had personally “profited handsomely” while using money laundering techniques that included shell companies and real-estate transactions with third-party beneficiaries.The filing says that Cabasso’s “lengthy criminal history” includes “numerous crimes involving deceit and efforts to interfere with judicial procedings.”In 1992, Cabasso was convicted of conspiring to influence a juror in a separate criminal case in which he was charged with a wire fraud scheme. He also was convicted in 1982 of grand larcey, and in 1985 of attempted grand larceny.”In March 2000, Cabasso was convicred of, among other charges, enterprise corruption … for his participation in a stock-fraud scheme that reportedly stole $176 million from 16,000 investors,” the filing by prosecutors noted.Cabasso was acquitted in 2012 of an alleged scheme of fraudulent use of a credit card belonging to a business associate to pay for a Google advertising campaign that drove traffic to Aventura’s website.Scams to import cheap equipment and re-label it as made in America are relatively common.However, the allegations in the Aventura case illustrate how, despite attempts by the U.S. to limit importing certain Chinese technologies on national security grounds, equipment still ends up in the supply chain and is used even in sensitive government facilities.The U.S. recently added a number of Chinese companies in the security and surveillance industries to its list of banned suppliers, which already included some of the country’s largest equipment makers, Huawei and ZTE. The new blacklist includes surveillance industry giants Hikvision and Dahua Technology, as well as important Chinese companies in the digital forensics, information security and facial recognition sectors.Follow @CNBCtech on Twitter for the latest tech industry news.