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Cisco Scammers Lassoed In London
David Utter
Staff Writer
2006-07-12
 Insider Reports RSS Feed
American law enforcement agencies worked with counterparts in the United Kingdom to takedown a pair of Russians accused of working a warranty scam against networking giant Cisco.
The crimes were worth around $16.5 million, a report in the Telegraph UK noted.
Apparently, the fraudsters used and abused customer service contracts with Cisco. The scam may have yielded more than 1,000 valuable pieces of hardware to the criminals during the duration of their efforts.
Once obtained, the criminals disposed of the items in a variety of ways. Some may have been sold online, while others delivered in "grey market" deals to businesses eager to get a discount on an otherwise unobtainable device.
The article also noted raids in California on homes and businesses had taken place, related to the investigation in London. The UK investigation led police to a firm called Com-wealth; the Telegraph had someone on the scene when the police made their raid, which resulted in a 46-year-old male and a 23-year-old female, both Russian, being taken into custody.
"Operation Sky," the six-month investigation into the thefts, began when Cisco reported to US and British authorities that 20 of its contracts were being used to fraudulently obtain Cisco devices. The company makes routers and other networking hardware, and has attained a leadership position in the industry.
Cisco would send out replacement devices to the contract holders, with the expectation the faulty devices would be returned to them. Since the faulty devices did not exist, no exchange took place.
Homeland Security, the Secret Service, and the Justice Department cooperated with City of London Police and the Crown Prosecution service on the case, the report noted.
Meanwhile, Cisco is very likely performing an internal review of its warranty procedures. $16.5 million worth of inventory shrinkage isn't likely to be brushed off as no big deal.
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Tag: Cisco
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About the Author:
David Utter is a business and technology writer for SecurityProNews and WebProNews.
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