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Verizon Tech Charged In $4.5M Equipment Scam
McGruber writes "Michael Baxter, a 62-year-old man from Ball Ground, Georgia, was recently arrested and charged with multiple counts of fraud for allegedly placing false equipment orders. As a network engineer at the southeastern regional headquarters of Verizon Wireless, Baxter allegedly submitted hundreds of fraudulent service requests to Cisco. According to prosecutors: 'The service requests were fraudulent in that no parts needed to be replaced, and instead of placing the replacement parts into service in Verizon Wireless network, Baxter simply took them home and sold them to third-party re-sellers for his own profit.'"
Building routers 1 part at a time...
He wants to be a defense contractor.
The real crime here might be the price of Cisco equipment.
You got that right. It was a pretty good scam! If you keep it low profile enough, no one would have noticed. But with enough "failure reports" concentrated and centered around him, it obviously caused an investigation. Another problem in here is that Cisco didn't want the old equipment back? That's really odd. Not wanting the old equipment back was the hole which made it all possible I think.
on the plus side, there's a chance that some of that "new" Cisco gear bought from that online auction side really is new!
Knowing the failure rate of product lines this would have shown up as one supplier with a higher than normal failure rate. The trend continued which is most likely how the high failure rate was investigated. With the theft, the failure rate would start to show up as an outlier on any chart as an unusualy high loss. In a product with high failure rates, this would have been more difficult to detect. For example a few missing light bulbs is hard to detect as they are a high failure rate consumable item. A large amount of high reliability network devices would show up much faster as an unusual event.
The truth shall set you free!
When Cisco ships a replacement part under smartnet (service contract) or via a partner it comes looking for the part that was to be replaced. Normally I believe the limit is 30 days and then Cisco will look to charge the customer for the part.
How this guy could think that no one would come looking for all of this is fairly surprising.
blindly antisocialist = antisocial
Except in Europe. We have some quite strict recycling laws that give the manufacturer part responsibility for end-of-lifeing old equipment. Not that they'll care at all if you just throw it in the skip.
I, for one, certainly can't imagine why anyone would dislike market traders, aside from envy. As we all know, financial markets have been widely regarded as practically a paragon of model free markets, remarkably free of corruption, fraud, regulatory capture, and other such socially disruptive distortions.
Also, trading floors are frictionless ideally planar surfaces, inhabited by perfectly spherical traders who obey the ideal gas laws...
I suspect this fell between the cracks of two companies.
Verizon presumablly wasn't paying for these parts (according to TFA they were replacements for suposedly failed parts under service contracts) so they probablly wouldn't have any purcahse orders or invoices for them.
Meanwhile cisco probablly didn't have information on what work each tech was doing so they could only check the reasonableness of verizons service requests as a whole, not the reasonableness of any one tech's actions.
note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
So, he stole 1 router?
This happened in Milwaukee Wisconsin for downtown sporting events... people in full gear sold parking spots on the road and in city owned lots, then when it was full they took off with their money and the police followed ticketing every car for illegal parking in city lots...
turns out they were just guys with cones and lights...
Lesson to would-be equipment thieves - don't try to dupe the accountants. They have the skills to balance the books, skills acquired over years of training. Skills that will make them a nightmare for people like you. That's ALL they do. They WILL spot the problem, and they WILL find you.
... to the repair department where He would intercept it. The undeliverable shipment would be de-booked from the sales accounting system. At this point, they had moved a piece of equipment off the production floor while maintaining the integrity of the production accounting system. Undeliverable equipment was supposed to be returned to the sale-able product queue, but only after inspection by the repair group. He would step in and take the equipment out of the system, preventing the asset from being re-introduced into the production/sales pipeline.
... anybody. There was a very stealthy internal investigation which was coordinated with the State Police. He and She were arrested in the office when they tried to remove the bogus equipment from the facility.
About a decade ago, a couple was running a similar scam at my job. She worked in sales as an order processor - basically the back-end of the sales process that initiates production orders. He worked in the repair department as a line manager. She would initiate a product order, and set it up with a genuine customer account, but a bogus "ship to" address. The product ($40k+ telecom test gear) would be manufactured and shipped, closing the loop on the production accounting end. UPS would try to deliver the product, but fail. It would be returned to the company as "undeliverable"
Manufacturing production was big enough that the float concealed the missing items. You'd have to reconcile the production, sales, shipping, and repair accounts to try to spot the anomalies. This scam persisted for a few years, slipping a couple of units out the door on an occasional basis. They finally got pinched when one of the phantom manufacturing units showed up on a repair order. It was fairly new, and the customer was attempting to get warranty service. Warranty repairs were handled by a different sales entry person, who couldn't resolve the actual sale of the unit to
They ran their scam too long. Had they moved somewhere else, I doubt any prosecution would have happened. Almost every bit of evidence would have been circumstantial. They got nailed because the Police observed them executing the scam, and grabbed them in the parking lot with the equipment in their possession. Best guess was that they swiped about $500k of equipment.
Wrong
There have been numerous studies done which show there is little relationship between wage paid and work done. Wages only influences the retention of your trained workforce (less wages, more training budget) when they switch to a more profitable job (in a bad economy, wage goes down and productivity up).
Put it another way. Take your average production line employee and double his pay. Does production increase any? No. Production is limited by outside factors (order received, assembly time, work flow from other members, waiting for results to be generated...) However that person may feel better, but as a company I really don't care how that employee feels (yes I know this isn't PC but it is real). Why should I then increase a person's wage?
Take another example. A company in the U.S. competes against a company outside of the U.S. Suppose that there is a extreme difference in labor costs between these two countries/companies. As a result the price for the finished product is much lower when produced in the company outside of the U.S. Which one will the consumer buy? (Hint, take a look at where your car/computer/clothing etc was assembled/built). High (or increasing) wages are counter-productive.