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The FBI seizes $145 million of counterfeit Cisco equipment

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May 10, 2010

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The U.S. Justice Department says that since 2005, the FBI has seized about $145 million worth of counterfeit Cisco equipment in a covert operation that's netted no less than 715 seizures and brought 31 felony convictions.

As part of the seizures, Ehab Ashoor, a forty-nine year old Saudi citizen residing in Sugarland, Texas, was sentenced last week to 51 months in jail and ordered to pay Cisco $119,500 in restitution fees after being found guilty of trying to sell counterfeit gear to the U.S. Department of Defense.

Additionally, two years ago, Ashoor attempted to traffic 100 gigabit interface converters that were acquired in China and contained labels fraudulently indicating they were genuine Cisco equipment, according to court documents.

The equipment was to be used by the U.S. Marine Corps for communication purposes in Iraq and Afghanistan.

And five months ago, a 33 year-old Chinese man, Yongcai Li, was ordered to serve 30 months in jail and pay restitution fees of $790,690 for trafficking counterfeit Cisco hardware, FBI officials said.

Code-named "Operation Network Raider" is a new initiative involving the FBI, Immigration and Customs Enforcement officials and U.S. Federal Customs and Border Protection agencies working to crack down on bogus routers, switches and other networking equipment.

In addition to costing Cisco and other U.S. businesses millions of dollars, the scams could threaten national security by injecting critical networks with gear that's unreliable or, worse, full of backdoors, viruses and malicious software that could seriously compromise critical communication networks used by the U.S. military or other vital federal agencies.

Exactly two years ago, Cisco officials said they had no evidence that any of the counterfeit networking gear contained backdoors.

The prospect that U.S. government and business networks may have deployed bogus equipment has raised national security concerns, since much of the counterfeit equipment originates from China.

Similar espionage fears were raised by recent data from the University of Illinois researchers, who in 2008 showed how they were able to modify a Sun Microsystems SPARC microprocessor to effectively create a hardwired backdoor capable of logging passwords or other sensitive data.

Since November 2007, the FBI and other U.S. authorities have made about 1,420 seizures of 5.6 million bogus semiconductors.

No less than 53 shipments were falsely marked as military or aerospace grade devices.

The Obama Administration has recently made it clear that it will beef up national security, and make available additional funding to the FBI, the CIA and other vital U.S. agencies in an effort to greatly reduce terrorism and other national threats.

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Source: The U.S. Justice Department.

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