Slashdot Mirror
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."
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.
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.
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
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.
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.
when are they auctioning this stuff off..?
"Counterfeit" (or in this case, unlicensed) goods are usually destroyed.
Please help metamoderate.
God, thats such a damn waste :( At least donate it to a local university or something for CCNA prospectives.
You're missing the whole point of this. Having these products in circulation is extremely detrimental to Cisco. Not just in terms of lost sales, but also that people will be calling in for tech support, attempting to get warranty replacements, putting it up on eBay, etc. Even if you donate it to a charitable cause it is costing them real money in a direct sense, and also tarnishing the brand and pissing off their legitimate dealers.
The product absolutely should be destroyed and the people responsible should bear the full pain of that loss. The only other remedy I could think of that might make sense would be to return the hardware to Cisco so that it can be either refurbished or destroyed at their discretion. I guess it would depend on whether the goods ultimately get classified as stolen vs fraudulently manufactured.
No, its a waste, plain and simple. They don't tarnish Cisco's name because they're known to be counterfiet. If someone turned around and sold them, sure, that'd be bad. However I personally see no issue of using perfectly good hardware to train prospective students. The hardware is counterfiet, the IOS software on it would not be. It's a waste because it could be used. Throwing away something that can be used is the very definition of waste.
Name a major laptop that isn't made mostly in China. Your "gov entities" are nuts.
Right!
The fact that this is from China is not the point, even if it is (sounds likely, IMO). That it *is fake* is the point - who cares where it comes from, apart from some xenophobic, er, xenophobes?
From TFA[1] - note the names involved - Todd Richard, Michael Edman, Robert Edman.
Sound Chinese to *you*??? Didn't think so.
When *in* China, in my experience, fake electronics is openly admitted as fake. They don't mind you buying the real stuff, but it'll cost more and take longer to get. That some foreigners have taken that same fake stuff and sold it as real is not China's fault - and I don't suppose they care either.
[1] From TFA:
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.
Max.
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.