Newegg reportedly ordered a shipment of 2,000 chips from D&H and 300 of them were counterfeit. Hot Hardware cites a posting from an Overclockers.com forum member named Dreadrok who received one of the fake CPUs. Dreadlock says he ordered a Core i7 920 from Newegg and received a completely fake processor.
According to HotHardware, NewEgg says the fake processors are actually demo units but looking at the pictures below (via Dreadlock), it's a hard excuse to swallow. What's more D&H has sent out cease and desist orders to two websites running stories on the fraudulent chips.
It has recently been brought to our attention that you are responsible for publishing on the internet, and specifically on your websites, untrue statements respecting allegedly counterfeit Intel Core i7 processors which you allege were sold to Newegg by D&H. This letter places you on notice that these statements are false. You have no basis for publishing these false and malicious statements about D & H. These false allegations are defamatory and disparaging to D&H”s business and business relations and have caused grave and irreparable damage to our client. [we] demand that you (i) cease and desist posting such defamatory material about D&H.; (ii) remove the contact and any reference to D&H from your website; and, (iii) post an immediate retraction and apology which shall remain posted for not less than thirty days."
Newegg, a trusted source among PC enthusiasts, is providing customers who received the fake Core i7s with RMAs.
UPDATE: Newegg has said D&H distributing is not the supplier who shipped the units, rather it was a company called IPEX. Newegg has terminated its relationship with IPEX. Read more about it here.