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Feds seize $143m worth of bogus networking gear

From China, with bugs

Internet Security Threat Report 2014

Federal authorities over the past fives year have seized more than $143m worth of counterfeit Cisco hardware and labels in a coordinated operation that's netted more than 700 seizures and 30 felony convictions, the Justice Department said Thursday.

Operation Network Raider is an enforcement initiative involving the FBI, Immigration and Customs Enforcement and Customs and Border Protection agencies working to crack down on the bogus routers, switches and other networking gear. In addition to costing Cisco and other US businesses millions of dollars, the scams could threaten national security by infusing critical networks with gear that's unreliable or, worse, riddled with backdoors.

As part of the operation, Ehab Ashoor, 49, a Saudi citizen residing in Sugarland, Texas, was sentenced this week to 51 months in prison and ordered to pay Cisco $119,400 in restitution after being found guilty of trying to sell counterfeit gear to the US Department of Defense. In 2008, he attempted to traffic 100 gigabit interface converters that were bought in China and contained labels fraudulently indicating they were genuine Cisco equipment, according to court documents. The kit was to be used by the US Marine Corps for communications in Iraq.

In January, 33-year-old Chinese resident Yongcai Li was ordered to serve 30 months in prison and pay restitution of $790,683 for trafficking counterfeit Cisco gear, officials said.

The prospect that government and business networks may have deployed bogus gear has raised national security concerns, since much of the counterfeit equipment originates in China. Similar espionage fears were raised by research from University of Illinois researchers, who in 2008 showed how they were able to modify a Sun Microsystems SPARC microprocessor to effectively create a hardwired backdoor capable of logging passwords or other sensitive data.

In May of 2008, Cisco officials said they had no evidence that any of the counterfeit networking gear contained backdoors.

Since late 2007, US authorities have made more than 1,300 seizures of 5.6 million bogus semiconductors. More than 50 shipments were falsely marked as military or aerospace grade devices. The Justice Department's press release is here. ®

Internet Security Threat Report 2014

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