See, this is why you need to hyphenate compound nouns that are acting as adjectives. Was this guy selling devices that detected fake bombs, or fake devices that purported to detect bombs? Was he a fake-bomb detector seller or a fake bomb-detector seller?
OK, well it's probably legal to sell equipment which, if it says something isn't a bomb, is always correct. It's therefore probably the case that he's been selling equipment that says everything isn't a bomb, regardless of whether it is or not. Reading the rest of the story, this is indeed what happened.
Why yes, now you come to mention it, I have been reading final-year project reports, some of which have ambiguous statements like this on every other page.