EDS duped by ‘NATO’ fraud

Electronic Data Systems (EDS) yesterday admitted it was conned out of millions of dollars worth of kit through a fake NATO project. It appears that a group of scamsters posing as NATO and US Air Force officers approached EDS in 1997 with "a highly sensitive voice recognition project for NATO". So impressed was EDS, that it shipped an order of computer audio and video equipment for the top secret project to the Netherlands. The villains then scarpered before paying. The thieves and the "tens of millions of dollars" worth of kit have since disappeared. A red-faced EDS, which was acting as a co-ordinator for other bidding vendors, was left to explain the incident to the FBI and EDS shareholders. The US computer services company said it did not expect any serious financial impact from the theft. But it was unable to comment further "because of the governmental investigations and the pending litigation". This latter statement was a reference to lawsuits filed by two vendors who got dragged into the fraud. One of these is believed to be Akai Musical Instrument Corp, a former subsidiary of Akai Electronic of Japan. Last year, EDS made $957 million profit on sales of $18.5 billion. ® Related stories: Fraud row lands EDS in yet more hot water