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Networking The Almighty Buck

DoJ Alleges Cisco Reseller Made $37 Million Selling Counterfeit Equipment 74

netbuzz writes "The latest scam involving stolen and/or fake Cisco equipment may also be one of the largest, as the Department of Justice says a 43-year-old San Jose-based reseller accumulated $37 million in ill-gotten gains over a period of years that he then poured into real estate and luxury cars. The feds say the guy also used part of the loot to set up college funds for his four children. At least four other such scams have been perpetrated against Cisco in recent years."
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DoJ Alleges Cisco Reseller Made $37 Million Selling Counterfeit Equipment

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  • by h4rr4r ( 612664 ) on Friday July 26, 2013 @12:48PM (#44392119)

    How is this a scam against Cisco?
    They won't let you put smartnet on a used device, so not like they have to support it. This is a scam on Cisco customers, not Cisco.

  • Re:College Funds? (Score:5, Insightful)

    by bmo ( 77928 ) on Friday July 26, 2013 @01:09PM (#44392341)

    Do you need to earn "Crime pays" kind of money to fund college funds for 4 children in America?

    Yes. It's why there is a TRILLION dollars in student debt.

    How much do Americans borrow/have borrowed for college?

    There is roughly somewhere between $902 billion and $1 trillion in total outstanding student loan debt in the United States today. The Federal Reserve Bank of New York reports $902B while the Consumer Finance Protection Bureau reports $1T. []


  • by ShanghaiBill ( 739463 ) on Friday July 26, 2013 @01:51PM (#44392843)

    Intel engineer here. We get the same shit. Everyone thinks we fill the chips with back doors when we don't.

    As a low level engineer, why do you assume that you would know about the back doors?

  • by King_TJ ( 85913 ) on Friday July 26, 2013 @02:10PM (#44393007) Journal

    I'm not saying any of this counterfeiting of gear is legally or morally "ok" -- but Cisco has LONG been inflating the prices of their equipment FAR beyond what it's reasonably worth, given the components inside.

    I remember at least 10 years ago opening up one of the Cisco PIIX firewalls our company had recently upgraded to, and discovering it was essentially a Pentium class PC motherboard and CPU inside. They were charging all that money for standard (outdated at that point) PC hardware, crammed into a Cisco labeled rack mount case.

    More recently, one of our branch offices had their Cisco router/VPN die on me. The office moved to a new location and all I did was unplug the power to it, move it to the new office down the road, and plug it back in. It refused to power on at all .... totally dead. At first we assumed it might just be a bad AC power adapter, but nope. The whole unit was defective. (Finally found a CIsco tech document online mentioning the issue. Supposedly early revisions of this unit had a problem where they could get caught in an endless loop after a power cycle and never come back up. Nice!)

    The worst part? All of the office's complex configuration settings were in the old, dead router. Luckily, they were saved on a CF memory card in the unit, so I took it apart and pulled the card out. When my boss went through the big song and dance to get Cisco to send us a replacement router and open an RMA for the dead one, I swapped the flash cards. It worked, but only sort of.... Turns out every connection made beyond the first 10 were getting nowhere, because all the licensing we had didn't transfer over. Cisco ties that part of each unit's serial number. So the office was down for hours while we fought again to get tech. support to do a license transfer to the replacement router.

    I fail to see what point there was at all to forking out the money for real Cisco gear, when it failed us like that AND was made so artificially difficult to get back up and running again? If we had used some cheaper, off the shelf product (like D-Link or what not?), we could have easily gotten another new unit going with far less downtime and had the ability to keep a spare around for the price of the 1 Cisco.

    The counterfeiters wouldn't be targeting Cisco so heavily if they weren't aware of the huge price markup on the stuff in the first place.

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