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Feds Seize $78M of Bogus Chinese Cisco Gear
Ian Lamont writes "The IDG News Service is reporting that US and Canadian authorities have made more than 400 seizures of counterfeit Cisco hardware from China in an ongoing investigation that started in 2005. The most recent seizure was last Friday in Toronto, where the RCMP charged two people and a company with distributing large quantities of counterfeit network components to companies in the US through the Internet. The RCMP seized approximately 1,600 pieces of counterfeit network hardware with an estimated value of $2 million, says the report. According to another source, bogus Cisco gear from China typically includes network modules, WAN interface cards, gigabit interface converters, and less expensive routers."
No wonder their economy is booming when they can make a killing of counterfeit hardware and bogus harry potter books!
I rather doubt that much of this equipment is truly "counterfeit", at least in the usual sense of a cloned design such as the iClone. Rather, what happens is that the contract manufacturer will buy extra parts and make more units than Cisco actually ordered, and then those units go out the back door after hours. They might have illegitimate serial numbers or might be missing the authenticity stickers on some internal chips, but they are otherwise identical.
It's a very difficult problem to manage unless you have trusted people overseeing the entire manufacturing operation. The amount of gross margin in Cisco gear makes this activity extremely profitable.
So that's why my router keeps crapping out on me.... Fake chips!!!
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Kevin Smith on Prince
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
And can I get 20 minutes of completely unsupervised access?
I'll even waive the disposal fees.
This would be a good way for China, or any other country that creates large amounts of tech goods, to spy on countries. China could embed components in the hardware to phone home with data. Yes people would catch on eventually that every packets are being sent, but a common person would not notice. How often do you suspect your network switch of phoning home with any information that looks like a credit card number or something worse?
I smoked pot once. But I DID NOT inhale. Will you hire me?
The reason is that the Chinese gov. does NOTHING to stop this production. To make clones, they even had to make the cases. This is designed to destroy the west's manufacturing capabilities. It is time for the west to step up and say no more. While over all this is directed at America, it is also happening on a small scale in EU. Once America is destroyed, CHina WILL focus on ALL of EU.
What genius figured out the Linksys stuff was actually fake Cisco Chinese knockoffs? Explains their routers intermittently dropping connections all the time. All that stupid Chinese solder and boards are screwing them up. The water on the island makes better wafers.
US, Canadian agencies seize counterfeit Cisco gear
Grant Gross 02.29.2008
U.S. and Canadian law enforcement authorities have seized more than US$78 million worth of counterfeit Cisco Systems networking equipment in an ongoing investigation into imports from China, the U.S. Department of Justice and other agencies announced Friday.
The coordinated operation, begun in 2005, has resulted in more than 400 seizures of Cisco hardware and labels, the DOJ said in a news release. The operation targets the illegal importation and sale of counterfeit network hardware such as routers, switches and network cards. One of the operation's goals is to protect the public from network infrastructure failures associated with the counterfeits, the DOJ said.
"Counterfeit network hardware entering the marketplace raises significant public safety concerns and must be stopped," Assistant Attorney General Alice Fisher of the DOJ's Criminal Division, said in a statement. "It is critically important that network administrators in both private sector and government perform due diligence in order to prevent counterfeit hardware from being installed on their networks."
The agencies that worked together on the operation included the U.S. Federal Bureau of Investigation's Cyber Division, U.S. Immigration and Customs Enforcement (ICE), U.S. Customs and Border Protection (CBP) and the Royal Canadian Mounted Police (RCMP).
The FBI named its portion of this ongoing initiative Operation Cisco Raider, an investigation involving nine FBI field offices and help from several other agencies. Over the last two years, the FBI's operation has resulted in 36 search warrants that identified about 3,500 counterfeit network components with a retail value of more than $3.5 million, the DOJ said. The FBI's work has led to 10 convictions and $1.7 million in restitution.
ICE and CBP have opened 28 investigations in 17 field offices since 2005. ICE has conducted 115 seizures of counterfeit Cisco products, with an estimated retail value of $20.4 million. ICE's investigation have lead to six indictments and four felony convictions. CBP has made 373 seizures of counterfeit Cisco hardware since 2005, and 40 seizures of Cisco labels for counterfeit products.
ICE and CBP seized more than 74,000 counterfeit Cisco networking products and labels with a retail value of more than $73 million.
On Friday in Toronto, the RCMP charged two people and a company with distributing large quantities of counterfeit network components to companies in the U.S. through the Internet. The RCMP seized approximately 1,600 pieces of counterfeit network hardware with an estimated value of $2 million.
Other recent cases:
-- On Feb. 14, Todd Richard, 33, was sentenced to 36 months in prison and ordered to pay $208,440 in restitution to Cisco by the U.S. District Court for the Northern District of Georgia. From late 2003 to early 2007, Richard imported shipments of counterfeit Cisco computer components from China, and separate shipments of counterfeit Cisco labels. He then affixed the fake labels to the fake components and sold the products on eBay, the DOJ said.
Richard sold more $1 million worth of counterfeit Cisco products, the DOJ said.
--On Jan. 4, a grand jury in U.S. District Court for the Southern District of Texas indicted Michael Edman, 36, and his brother Robert Edman, 28, for trafficking in counterfeit Cisco products. The indictment alleges that the Edmans purchased and imported the counterfeit computer network hardware from an individual in China, then selling the products to retailers across the U.S. The Edmans shipped some of the counterfeit hardware directly to the U.S. Marine Corps, Air Force, Federal Aviation Administration, FBI, defense contractors, universities and financial institutions, according to the indictment. These organizations had purchased the product from a computer retailer serving as a middleman, which in turn purchased the products from the Edmans.
The attractiveness of low cost manufacturing in China seems to be inevitably offset by some other negative, whether it be the creation of instant competitors once the contract manufacturer figures out how to reach their customers' customers, or ersatz ingredients (melamine in dog food last year for instance). Remind me again, why is free trade with China such a great deal for the developed world?
Dog is my co-pilot.
have they been seizeing this stuff from the people selling it, or wherever they can find it (including tearing the guts out of working networks)? If it's the latter then; why? Shouldn't they be trying to work so that the victims of this don't get battered any more over it and can get the bad hardware out of their systems tidily.
FGD 135
when are they auctioning this stuff off..? I'd love to get me some pods together on the cheap.
Other than the brand name on the boxes being fraudulent, what is the difference between this HW and the real Cisco products? If they're even close in quality, then catching these fraudsters will move Chinese manufacturers to market them under their own brands. Then they'll just be violating patents, not trademarks (and copyrights in the manuals). But then they'll be pressured to actually create their own better ways of doing it. Which is actual progress, even if not quite as profitable as the ripoff.
If Chinese counterfeits can get marketed under their own brands, we'll actually have some price competition. And maybe when some American companies get killed by their OEM factories like Japanese manufacturers did to cameras and consumer electronics in the 1970s-80s, we'll see some more caution in shipping all their tech expertise overseas to create their competitors. They might be more likely to consider the less immediate costs of outsourcing from a country where the law (usually) protects things like intellectual property, contracts, labor and the environment.
Or maybe every generation is doomed to watch America squander its hard-won tech leads for the sake of a few years of cheap manufacturing that then eats the parent for lunch.
--
make install -not war
... bogus Cisco gear from China typically includes network modules, WAN interface cards, gigabit interface converters, and less expensive routers
It's easy to identify this bogus gear in the wild. It's really really heavy, because it's made of lead.
- The Kessel run is for nerf herders. I can circumnavigate the entire Central Finite Curve in a lot less than 12 parse
Each one of these routers came with the ruleset for the Great Firewall of China pre-loaded! Perfect for suppressing criticism in my company! Great seller, would buy from again! A++++++++++++
Is is it about time to terminate China's Preferred Trade Status with all the problems with Chinese products that are dangerous, poisonous, fake, bogus and fraudulent. Both political parties have voted in favor of keeping China's preferred trade status. Why? It can't be the superior products we get to buy from China.
They just had to look for stuff covered in all that lead paint.
"My country, right or wrong; if right, to be kept right; and if wrong, to be set right." --Senator Carl Schurz (1872)
No, I think the goal is to protect the corporation. Not that I completely object to these actions, just that it's getting pretty tiresome to see the police always trotting out the public safety angle.
If I can get it for half the price, I'll buy it. I buy 13 dollar power supplies KNOWING they will die in 3-6 months. But as long as they work in the midterm, I'm happy. Same goes for routing equipment. BRING ON THE PAIN!
Restore the madness of youth's lechery
My first eye scan of the title had me confused because I thought it said "Bogus Chinese DISCO Gear." Which created some very confusing mental imagery.
If you cant engineer it, then steal it.
This is something that been going on with small engines and Chinese manufactures too..
A US company will contract for a specific line to be produced..
A few months later you'll see a Hong Kong Web store open up selling the same motor for 1/2 price..
The quality usually isn't all that great..
I suspect the manufacturer might be finding things to do with excess parts and dumping in the parts that wouldn't pass QA for the original contract.
If you think it's expensive to hire a professional to do the job, wait until you hire an amateur. --Red Adair
If your router has an uptime of 'years' you aren't applying critical security patches.
Like it or not, IOS has had a few over the past 10 years that should be applied.
It sounds like most of these Chinese counterfeiting cases have been manufacturers making exact copies of the items they were contracted to make, then selling them without the warranty, name, etc. for similar profit margins.
How much of this is the manufacturer just building more than what they were supposed to, and how much of it is actually theft of intellectual property? I remember reading that the Soviet Union would go the IP theft route...obtain a computer from another country and totally reverse-engineer it so they could use a similar design. My bet is that these manufacturers just want to make more money and not necessarily use the same quality parts. (If you're building 1000 routers, the difference between a $10 transciever and a $100 one is big, for example. How worried should we be that, say, the manufacturer has reverse-engineered IOS and put it into their own gear?
Either way, if my business was based on building clever hardware, I'd be worried about outsourcing the manufacturing to anyone, let alone a different country. However, there is absolutely no way to stop people from demanding cheaper goods. It's at the point where people are haggling over a few cents -- we're just addicted to low prices.
I'm generally not one of these protectionist, "keep America working" types, but I can't see a good way out of this situation. All the scenarios are bad:
- Go to war with China or cut off trade completely in some other fashion --> Huge price increases and emergency ramp-up of domestic production --> possibly a bad recession.
- Continue as-is --> More poisoned or cloned merchandise and IP theft --> eventually a very bad situation for us.
- Try to get China to comply with environmental and IP laws --> ???
Had actually received some of this gear unknowingly and while some of it does work...there were a few cases where that when a switch that would lose power the GBIC would not come back up in a 'no shut' state. Instead you had to console into the switch and issue a 'shut > no shut' on the interdace to get the port to come back. So while the technically do kind of work, it is not something I would recommend deploying in a mission critical switch/router.
Apparently the counterfeit Cisco products were labeled "D-Link."
While yes their have been IOS updates, alot of their equipment can be updated without a reboot of the router, usually just the management module, and if the equipment has redundant modules, then you update them separately, without the need to reboot, or lose connectivity.
I came, I conquered, I coredumped
You Lacist sod! You ale a learry bad pelson!
Tsukasa: All I really want, is to be left alone...
It's a very difficult problem to manage unless you have trusted people overseeing the entire manufacturing operation. The amount of gross margin in Cisco gear makes this activity extremely profitable.
And this is where outsourcing becomes so viciously dangerous. When considering outsourcing, it's important to limit it to only those areas that are not "core competencies". If your core business is to manufacture hardware, it's just stupid to outsource manufacturing hardware. If you're in the business of hosting, don't outsource your hosting.
Sure, when you do, there may be short term cost reductions. But in the process, you lose something very basic and fundamental. When you outsource your core competency, you are sort of living a professional lie, and that lie will catch up to you!
I have no problem with your religion until you decide it's reason to deprive others of the truth.
"When information is power, privacy is freedom" - Jah-Wren Ryel
cleaning my glasses...
The first time I read that I saw "Feds Sieze $78m of Bogus Chinese Crisco Gear".
I don't want to tell you what popped into my head....
Clear, Dark Skies
Since it's all made in China anyways and patents mean nothing over there... exactly how is this counterfeit?
Let me make a guess here... It's the same stuff, just without the right paperwork or import tax/fee applied. Kind of like how they claim "Grey Market" versions aren't real despite being from the same company in China.
The whore, the pimp or the johns? Most slashdotter are pointing to the whores.
You may recall the Taiwanese router vendor that put backdoors in their routers (no one every explained why that I recall). And then there's all the picture frames and thumb drives that inject viruses.
If someone is producing un-lic gear why not pick up a few more bucks on offer to add compromises.
Why not go cheap on the capacitors or the solder? not like it will hurt your brand rep.
Not saying it happens but why not?
Some drink at the fountain of knowledge. Others just gargle.
Remember 3Com? Their stuff was made by Delta and Accton, and they just made different plastic exteriors, slapped their name on it and made BANK until people realized they could get same functionality for less money. You could buy same exact gear, usually in "ugly" but functional metal enclosures for much less money from companies like SVEC, Hawking Technology, D-Link, Netgear, Asante, SMC, etc... On one hand - Fake or Real, Cisco branded units still increase Cisco's market share, especially since the only difference is in legitimacy - licensing, and not in functionality. As it stands Cisco is unique in the manufacturing sector because they make more money off their hardware than off software and service contracts, so its no surprise they are so militant about protecting their interests. Since they really cant do much to the manufacturers in China best they can do is to come down HARD on people selling it in the US.
Does any of that Chinese Cisco shit actually work?
Not that I want to buy it - just curious - can they make something that can be passed off as working hardware?
If they can - that's kinda impressive IMHO
---- "Logoff! That cookie shit makes me nervous!" - A. Soprano
Here's the link to be router backdoor story
Some drink at the fountain of knowledge. Others just gargle.
Just to jump in here, you mentioned inkjet cartridges, and I believe the prices are inflated. However in my experience using knock off carts, refill kits or even commercial refill services you tend to get back a cart that lasts 1/4 of the time for 1/2 the price. Just my 0.02
I'm sick of following my dreams. I'm just going to ask where they're goin' and hook up with 'em later.
I wonder how they keep the MAC addresses on this stuff straight. Do they copy existing ones so these units slip under the radar? Can you imagine the - albiet small - headache from some counterfeit and real gear having the same MACs, on the same network. It'd be like the old days when DEC NICs would fail and obtain the same MACs - that was fun tracking down!
Noodles, fireworks, compass, paper. (We got it from Chinese)
Geometric motifs on old Greek pottery, mythological chimera creatures in old Greek stories (Got it from Pheonicians and other middle east civilisation)
Modern mathematics (We got it from Arabs during middle age. The irony is that themselves partly got it from old greek sources).
etc.
Civilization development is a long story of different cultures stealing and subsequently improving from each other. Idea "theft" and improvement is an absolute necessity to improve science and technology (and opensource is a nice example that is very close to
Just imagine what would have happened if "american-style patents-on-ideas-and/or-concepts" did already exist back when the wheel was invented...
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
You might have missed the part where I said "not that I completely object".
I just don't like being lied to about it.
Actually, if the factory can make 100% of its run for Cisco in 80% of the time allocated, the crooked factory manager is likely to see no reason why he can't use the 20% of the time he saved to knock off a few copies. See the article below about "cleans". The knockoffs are probably indistinguishable from the real items, except they don't get QAed as thoroughly.
Give a man a fish and you have fed him for today. Teach a man to fish, and he'll say "WHERE'S MY FISH, YOU IDIOT?"
In my experience, there has been a huge difference between counterfeit and the real thing. We bought some single and dual-port T1 cards from a large vendor in New England which were marketed as used but tested. The counterfeit cards worked about 20% of the time. The cards were cheaply made- example: the screw head would pop off if you tightened it too much. I would speculate that these cards didn't come from a factory already manufacturing genuine parts, but the attention to detail on the counterfeit cards was quite astounding- stickers, markings on the PCB, etc. The vendor eventually replaced the cards with more counterfeit cards, then finally with Cisco authorized refurbished cards.
Cisco has won an injunction that prohibits Huawei from selling routers in the US.
The router code is identical down to the security bugs.
It's all about making a bet that the short term reward is big enough and in a short enough term, and that the long term consequences are far enough off.
There's some rationality to it, but I think this kind of mindset is what drives executive salaries stratospheric -- *they* know what they're doing is long-term negative, so they need to be paid "up front".
i'll start with few things that hit the nerve...finally. "I remember reading that the Soviet Union would go the IP theft route...obtain a computer from another country and totally reverse-engineer it so they could use a similar design"
:)
do you also remember USSR exporting back the REng equip back to USA? by the millions? what Russia did is reverse engineer, improve and build a few examples as back then only small quantities of hardware was produced due to fast paced improvements in tech.
"Go to war with China or cut off trade completely in some other fashion"
you cant. sorry too late. they own your girlfriends undies and even the VEnus she shaves with. ( as in they make ALL). i saw mushrooms (the shitty kind, i mean the ones that i saw growing on cow dung) in 99 cent store... made in china.... wtf? cant grow mushrooms now? same for dills, and prety much common stuff that got me thinking...
"Continue as-is" even though i am not am american, you (if american) should act and BUY american. and tell ur congressman whether he wants to bend over and you ger few hundred...million chinese and let them FSCK him in the ass. and no lube (made in china also..sux for him). LOOK at the label. last time i was in russia ALL products next to price/store tag/display tag displayed Country of origin.. and i thought it was kinda stupid at first, but this gives you the right to vote not just with ur lovely keyboard but with your wallet (gas prices anyone)
i dealt with lots of chinese and this is few sound bytes that i got from them.
- "we [the chinese] copy to save money and time on research and this way no need for investment", so basically they just skim off someone elses lost health (programmers like umm.. us) and sleepless nights, so someone can sell me back MY OWN product 'somehow bypassing the customs' and leaving me without my royalties
- a few days ago i saw a chinese student (woman) blatantly copying stuff of the net for a programming class. so she called the professor to help her... prof notices the copying and the interesting thing is that he is telling her that shes about to flunk for cheating and she does not understand the concept... i.e. behaves as if it was the most natural thing. i would not be surprised if one day she turns in someone elses program with programmers name scratched with pencil mark or a new label over it
lots to think about. can ur mind handle it? whatcha gonna do bout it? havent done anyhting yet? well grap your anckles and enjoy.
P.s. so feds are more interested in the material that i jerk off to instead of dealing with outright injustice for local citizens? its your right to get a handmade ultimate deluxe gourmet vibrating DILDO made in USA instead of getting a cheap copy from China that will break if you put the wrong end in. !!!
Dont Judge The situation by the Misfortunate. Goga.
HTF is this a troll? As anyone who has lived in east Asia (especially Japan) can tell you, that sort of spelling is pretty common. Definitely should be modded up Funny. I couldn't even begin to count how many products I've seen on shelves that actually had spelling like that. Heck, right now on my desk, there is a toothbrush (from China) whose package advises that it should be thrown out after three "moths."
And to forestall any whiny do-gooder types who'd like to throw accusations at me: why, yes, my wife is from east Asia and our children were all born there, and yes, I do speak a couple of east Asian languages in addition to my native English. Thanks for playing.
Must have been downmodded by some alcohol dehydrogenase deficient ROMhead. Under certain circumstances, telling the truth is suicide by 'take-out cook'.
...when they help build the "great firewall of china". I think there is a delicious sense of irony in the Chinese copying their gear so they don't have to pay Cisco for more firewall gear.
My ism, it's full of beliefs.
Apparently, the RCMP coordinated their efforts with the RCP, the RSH, and--of course--the ICMP.
The parent post hit it right on. Literally millions of chinese workers left their homes and families in the rural areas, and went to live and work in the cities where the factories are! The simple fact that they are willing to do this while US factory workers won't is what makes it worth the trouble to build factories in China.
When the workers in China got rich enough (relatively speaking) that they are no longer willing to leave families behind, you will see those factories either spread to the rural areas in China, or move to some other even poorer countries where they can find the workers.
Oliver.
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--- I am known for the ones who want to find me on the net. Is that a privacy risk or a privilege? One might wonder..
Huawei got caught five years ago using misappropriated Cisco IOS software in Huawei routers.
I fail to see how routers labelled "Cisco" with stolen software represents "competition". Cisco's loyal customers, should they buy these crap products, will not improve their impressions of Cisco as they go through the hassles of non-support for counterfeit products. Cisco's name gets sullied. Cisco loses revenue.
This is not competition, but intellectual property theft, plain and simple.
First, it is indeed competition, even if it were theft. You're conflating moral and economic arguments. The moral ones matter only when they have economic impact. That's how international trade works.
Second, it's not "stealing" if Cisco, "stolen" from, still has what it had before. It's piracy, bootlegging, whatever you want to call getting one of your own that you're not entitled to without reducing the amount that the entitled party has.
And third, if that kind of competition from Huawei hurts Cisco, that's not Huwei's problem - it's Cisco's. Again, that's competition. And FWIW, if it's the same except it can't be supported by Cisco because its serial# isn't in the Cisco database (but is otherwise identical), then it's not a "crap product", unless the identical Cisco original is also crap. It's also speculative that someone who bought a counterfeit and was rejected by Cisco for support would indeed "sully Cisco's name", and not sully just the name of the vendor who sold them the counterfeit. A little, maybe, but not much.
None of this diminishes the damage the counterfeiter does to Cisco (and to the customer who's stuck without Cisco support). It's wrong, it's unfair competition, there are reasons it's illegal. But it's really opportunity cost, not actual loss, except the lost cost of marketing to that person buying the counterfeit instead, which is usually a negligible cost.
It's got to be stopped, especially for macroeconomic reasons that are sapping US industrial strength that I've discussed elsewhere in this thread. But it's not so plain, nor simple. Even if it is bad. It's important to keep the problem properly in mind, so it can actually be solved, instead of solving the wrong problem, which won't really work for the right problem.
--
make install -not war