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New Jersey BOFH cuffed over $10m Cisco scam

Replacement kit 'fraud'

Internet Security Threat Report 2014

A public sector computer technician from New Jersey has been arrested over allegations he took Cisco for $10m through a fraud that exploited the networking giant's programme for replacing broken or defective kit.

Michael Kyereme, 40, from Piscataway, New Jersey, was arrested on fraud charges on Friday in connection with the alleged scam. Kyereme, who faces offences punishable by up 20 years imprisonment and a $250,000 fine if convicted, is being held in custody pending the outcome of a bail hearing scheduled for Thursday.

Kyereme worked as a IT contractor for the New Jersey city of Newark, where his duties included network troubleshooting, a role that involved responsibility for ordering replacement parts from Cisco. The contract between the city and Cisco obliged the networking giant to replace malfunctioning kit on the basis that broken kit would be returned within 10 days.

Kyereme allegedly exploited this program to order replacements for expensive equipment that the city never had, or for parts that were working normally prior to flogging the gear to an as-yet unnamed out-of-state reseller, and pocketing the profits.

According to the criminal complaint, Kyereme had requested 280 items of networking kit from Cisco since August 2002 (some of which cost up to $250,000) on the basis of false claims that they were replacements for Cisco-supplied components in the city's network that had somehow gone wrong.

He returned allegedly faulty parts only 132 times, of which only 33 matched the replacement kit he'd received. Kyereme allegedly extended the scam by ordering kit on behalf of Newark's police and fire departments. FBI agents recovered a haul of Cisco kit worth an estimated $3m when they raided Kyereme's home on 2 March, the Newark Star Ledger reports.

The case against Kyereme is the second in recent days involving the alleged fraudulent abuse of Cisco's kit replacement program.

Michael Daly, 53, of Massachusetts, was collared last week over allegations he used false identities in a39 states to order expensive "replacement" parts from Cisco without returning the corresponding parts, or anything at all. ®

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