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."

Comments

Company Liable?

[Bigby]

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.

Re:Company Liable?

[jmerlin]

Listen man, it could've been much worse. He could've pirated some music or a movie, too. He'd have 20 years in prison and owe $50,000,000.

Sounds to me like he got off pretty easy.

Re:What kind of prison? First?

[fustakrakich]

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.

This is not the first hit on Verizon...

[JRHelgeson]

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/

Re:What kind of prison? First?

[raehl]

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.

It just shows how stupid this guy is.

[raehl]

If you have an extra $10,000, buy your girlfriend new boobs.

If you have an extra $1,000,000, get a hotter girlfriend.