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Verizon Tech Given 4-year Federal Prison Sentence For $4.5M Equipment Scam
McGruber writes "Michael Baxter, the network engineer at the southeastern regional headquarters of Verizon Wireless who submitted hundreds of fraudulent service requests to Cisco, has been sentenced to four years in federal prison, followed by three years of supervised release. Baxter was also ordered to pay $2.3 million in restitution to Cisco Systems, and $462,828 in restitution to Verizon. Instead of placing the replacement parts into service in the Verizon Wireless network, Baxter took the parts home and sold them to third-party re-sellers for his own profit. He used the money to buy cars, jewelry and multiple cosmetic surgeries for his girlfriend."
So when an employee does something great using the company's resources, the company gets the money. But when an employee does something illegal on the company resources, the company doesn't suffer?
I understand that guy getting something. But Cisco should be suing Verizon, not the person. Verizon would then sue their former employee.
He is a living proof that crime pays.
He got millions of dollars and a great lifestyle for years and now he basicaly got free home and free meals for a number of years.
Then he simply would've received a harshly worded letter or speech from congress. Eh, like everything else, when it comes to 'justice', it all depends on who you are.
“He’s not deformed, he’s just drunk!”
...incidentally, I don't mean the theft part, which is pretty dumb on its own. What I mean is, he should have been socking that money into Cayman Island accounts (or maybe Venezuelan bank accounts and such), then get out of dodge once he hit the $2m mark or so. Get enough scratch and live in a 3rd-world country that doesn't do extradition, and you can get an entire flock of local women instead of having to throw a ton of money on just one.
Then again, dunno how much money he himself got, as the $4.5m figure could be what Cisco values the parts to be, which given Cisco's pricing could be as little as three fans and a 6509 power supply w/ SmartNet support. :p
I am curious as to WTF these guys think when they start pulling stunts like this, however. I mean, if you're gonna flirt with PMITA Prison time, you'd best be damned smart about it, do at least some research, and get your shit planned in advance...
Quo usque tandem abutere, Nimbus, patientia nostra?
We had a Department of Corrections employee (for the state) who bought $123,000 worth of IT equipment then sold it on eBay for $54,000.
Obviously he was caught when the audit was done. So far, no comment from his attorney.
We will bankrupt ourselves in the vain search for absolute security. -- Dwight D. Eisenhower
cosmetic surgeries for his girlfriend
Just HOW MUCH does it cost to modify a blow-up doll?
I think the Cisco folks are entitled to some action, since they can get their money back on this specific situation.
You don't know anything about federal prison. Some of them can be brutal.
Threatening someone else's life at gunpoint in 60 seconds is completely different than stealing $2.8 mil over the span of a decade.
But I think you're seeing in terms of theft of $20 vs. $2.8 mil.
I think terrorizing someone else is worth at least several thousand dollars in therapy. For some people it takes years to trust another human being again. Others never recover. But if you're a tough guy, you can carry on like it's no big deal. For Sprint and Cisco, $2.8 mil is a drop in their financial bucket.
If he'd held up a convenience store he could easily have gotten 7 mandatory or more
If he had been the company president and a big political contributor, some poor tech way down the ladder would be facing charges instead. If he was a higher up at Goldman Sachs, he would be given a cabinet position at the white house.
The guy committed fraud, hardly worth locking him up. Just take his property and garnish his income for the rest of his life, or until the money is paid back.
“He’s not deformed, he’s just drunk!”
Federal != "white collar". Minimum security == "white collar". My friend's brother got a ten year sentence in Federal prison for loaning money to a dope dealer (as did half his HS graduating class; dealer got busted and set up everyone he knew whether or not they'd ever had anything to do with drugs, dope dealer spent 2 year in Club Fed). Mike's brother was out in five years, and his life was completely ruined. He was a diesel mechanic who worked on big rigs, but of course lost his job. His wife met another man while he was in prison and divorced him. So he's now unemployable and single with few prospects of ever having another woman.
"Chickenshit sentence"? I hope I've left you a little less ignorant.
Free Martian Whores!
I've heard the argument made and I disagree. Yes, threatening someone with a weapon causes some very real emotional distress, but of the people I know have been through a robbery in most cases it was so quick that beyond the initial moment of shock it's not something that affects their day to day lives. These "harmless" white collar crimes that involve millions of dollars have the power not only to affect far more than just one person, but to put them through years of anguish. One robbery might scare a clerk shitless for 10 minutes, one mortgage scammer can affect thousands of people, destroy their health, end their marriages, and put their families on the street without ever seeing the victim face to face. At least most robberies are committed out of desperation rather than a sense of greed and entitlement.
Verizon has been targeted many times. They would steal network equipment, then call Cisco to get an advance replacement RMA, which would take their stolen equipment and double it. Then they would sell the gear on the 'Grey Market' for Cisco hardware. They focused primarily on Cisco 12000 line cards, where an individual card sells for $100k+ and are installed in a redundant fashion.
Then they started just getting serial numbers for equipment and starting RMA's for that, and selling it on the Grey market. When Cisco called to get the status on the return... Verizon would reply with "what return".
I helped track one of these cats back in early 2000's - once he found we were hot on his trail, he abandoned his Bentley, and his Mansion and fled back home to Russia - where he lives currently. Interestingly, this same type of scam popped up in eastern Europe shortly after his relocation.
Our suspect had a friend who worked in security at one of the Verizon data centers. He would grant 'back-door' access to a facility, and permit the theft of the hardware. Stories abound of this guy being too poor to buy gas one day, borrowing $50 from friends in order to make to to the airport to fly out to New York then from New York to California, then California back home - pulling a massive roll of C notes from his pocket and repaying the $50 loan + a couple of C-notes to show his gratitude.
Perhaps the reason we hear about this happening with Verizon was that they became aware of the scam early, then kept tracking the perps until they were finally able to catch them. Kudos to Verizon Security for being able to close the loop on this one. These cases are extremely hard to track and crack.
http://www.nytimes.com/2004/11/27/nyregion/27theft.html?_r=2&ex=1152936000&en=28ee4e10417b8e50&ei=5070&oref=login
http://www.zdnet.com/level-3-falls-victim-to-data-centre-robbery-3039284520/
Good security is based upon reality and common sense. Common sense is a function of having common knowledge.
but of the people I know have been through a robbery in most cases it was so quick that beyond the initial moment of shock it's not something that affects their day to day lives
You're experiencing selection bias. It's hard to meet people who have been killed in robberies.
If you cause a violent confrontation, there is real risk someone gets seriously hurt or killed. They could certainly be injured in a manner that costs society far more than $2.8 million in medical treatment costs over the life of the victim.
If you steal some equipment, there's a financial loss, but no one is going to get hurt.
Discouraging people from creating violent situations is far more important than discouraging people from stealing from companies with insufficient controls.
I'm far more worried about a guy who might point a gun at my head when I'm trying to pick up some milk than I am a guy who is going to steal some hardware when I'm not looking.
paintball
If you have an extra $10,000, buy your girlfriend new boobs.
If you have an extra $1,000,000, get a hotter girlfriend.
paintball
I've seen major ISPs put networking gear acquired on the used market into service. During the years after the dot-com bust, it was pretty common.
...was doing this outside a CEO position.
What do I know, I'm just an idiot, right?
The prison time is only PART of the sentence! " Baxter was sentenced to 4 years in prison to be followed by 3 years of supervised release, and ordered to pay $2.33 million in restitution to Cisco Systems, and $462,828 in restitution to Verizon."
Nearly $2.8 million to pay back off of the $2.8 million they say he stole. I am guessing that he doesn't have ALL of the proceeds from his caper.
IF he gets minimum security Federal Prision Camp, he will likely go closest to home. FCP Montgomery. http://www.bop.gov/locations/institutions/mon/MON_aohandbook.pdf
Don't sound like 4 years of fun to me. In any institution or camp there is going to be a heirarchy. This guy is none of the things that are going to make his life in "camp" fun. He is not rich! He may be a tough bird, but he is an old bird at 62. All those ailments that get treated outside of "camp" are going to go untreated. No more private doctors. Dentists that only pull teeth. Hey, maybe he can get one of the best jobs there and make $1.46/hour.
Neither Cisco or Verizon lost their lives or were even traumatized by his actions. However, they need a sentence that works as a deterrent, which this is.
Punishment fits the crime.
For every benefit you receive a tax is levied. - Ralph Waldo Emerson
It's easy to see at the extremes.
Imagine a world with twice as much property theft and zero violence. Imagine a world with twice the violence and zero property theft.
Which would you rather live in?
People with philosophy degrees flipping burgers for example.
I don't understand how this qualifies as underemployed...
+1 Disagree
Agree fully. Why put people like this in jail? Put them in indentured servitude instead. He could be put to work in a homeless shelter, making minimum wage. That way he can pay for his own upkeep AND be a benefit for society.
If you steal money, you can be ordered to pay restitution. (Granted, I doubt Baxter will be able to pay that kind of fine.) If you kill someone, you can't unkill them.
and drug possession. Don't forget that. In fact, you'd get more time for having 10lbs of pot on you than you would for murder. Average time served for murder is less than 7yrs.
Verizon called. They want their boobs back.
paintball
I'll take zero violence and double property theft any day of the week.
You can always buy more stuff. Death is permanent.
paintball
There are a lot of shades of grey between the white of perfect innocence and the black of deliberate evil..
Punching someone in the stomach and taking a few quid in cash may be hugely less damaging than stealing all their money in a fraud and bankrupting them
To have a right to do a thing is not at all the same as to be right in doing it