FBI onto Fake Cisco Equipment

A discussion board recently posted an unclassified PowerPoint presentation from the Federal Bureau of Investigation, which provides an in-depth look at the criminal investigation into the selling of counterfeit Cisco networking equipment to federal agencies.

The presentation reports a spike in the total number of seizures of products that violate intellectual property rights from 8,022 in 2005, valued at more than $93 million, to 14,675 in 2006, valued at more than $155 million.

Counterfeit Cisco equipment â€" including routers, switches, and other hardware components -- finds its way into federal networks because of weaknesses in government procurement and problems with Cisco’s own sales practices, according to the presentation. In the case of the former, agencies purchase from uncertified suppliers using government credit cards or from subcontractors that are two or three levels separated from the manufacturer and allow “blind drop” or “drop ship” methods of fulfillment that limit the possibility of quality assurance checks within the contracting community by delivering the products directly to the agency from the supplier.

For Cisco’s part, reliance on distributors and resellers for the sale of products, combined with a lack of coordination between the company’s brand protection and sales teams perpetuates the problem, according to the presentation. Furthermore, it notes a lack of any vetting of companies selling equipment to government, beyond standard background checks, by either Cisco or the General Services Administration.

The presentation highlights a number of cases where counterfeit Cisco equipment managed to infiltrate federal agencies, including one that involved a top tier partner sourcing equipment from China, that eventually landed in a secure Navy facility.