Feeds

Pilfering sysadmin gets four years and $2.3m fine for kit theft

FBI nails Verizon engineer over Cisco scam

Beginner's guide to SSL certificates

A former Verizon network engineer is beginning a four-year jail term after being sentenced for scamming Cisco and Verizon out of millions of dollars worth of kit and fencing it through the reseller community.

For nearly a decade, Michael Baxter, 62, used his position at Verizon to order processors, cards, and other networking equipment from Cisco, saying it was needed to repair Verizon's critical infrastrure. In fact, he was selling it and using the proceeds to fund a high-rolling lifestyle, including frequent foreign holidays and a round of plastic surgeries for his girlfriend.

"To accomplish his fraud, this defendant exploited a program designed to keep this critical infrastructure running uninterrupted: Cisco’s program for replacing expensive equipment on a moment's notice," said United States Attorney Sally Quillian Yates in a statement.

"He also abused his insider access to Verizon's procurement system," Yates said. "He funded a lavish lifestyle with his stolen funds and has now earned himself several years in a federal prison."

Seven years after joining Verizon, Baxter began exploiting purchasing access to an extended warranty contract Verizon had with Cisco. If a part failed, Cisco undertook to get a new one sent out before receiving the old one in return, to deal with network outages more quickly. Baxter sent out hundreds of false failure reports for equipment, some costing up to $40,000 apiece, and then sold them to resellers.

Not content with this system, Baxter also had Verizon purchase around half a million dollars worth of kit from Cisco directly, again apparently for critical network operation. This too went out via the reseller market.

Baxter ran this scam for almost a decade before being found out and fired from Verizon. According to the FBI, he spent his purloined loot to buy jewelry, cars, and "extravagant international travel, and other personal luxury goods and services, including multiple cosmetic surgeries for his girlfriend."

In addition to his sentence of four years in the big house (and three years of probation thereafter), Baxter was ordered to pay Cisco $2,333,241.18 in restitution and $462,828 to his former employer. Neither company is expected to see much of that since there's not much of a market for second-hand breast implants, so the ruling will most likely bankrupt Baxter.

The fact that a network engineer was able to get away with such a relatively simple scam for almost a decade raises serious questions about the internal accounting of the companies involved. El Reg suspects that Baxter is not the only person involved in the affair that's going to earn some hard time in the near future. ®

Protecting users from Firesheep and other Sidejacking attacks with SSL

More from The Register

next story
Spies would need SUPER POWERS to tap undersea cables
Why mess with armoured 10kV cables when land-based, and legal, snoop tools are easier?
Early result from Scots indyref vote? NAW, Jimmy - it's a SCAM
Anyone claiming to know before tomorrow is telling porkies
Jihadi terrorists DIDN'T encrypt their comms 'cos of Snowden leaks
Intel bods' analysis concludes 'no significant change' after whistle was blown
Israeli spies rebel over mass-snooping on innocent Palestinians
'Disciplinary treatment will be sharp and clear' vow spy-chiefs
TOR users become FBI's No.1 hacking target after legal power grab
Be afeared, me hearties, these scoundrels be spying our signals
Hackers pop Brazil newspaper to root home routers
Step One: try default passwords. Step Two: Repeat Step One until success
China hacked US Army transport orgs TWENTY TIMES in ONE YEAR
FBI et al knew of nine hacks - but didn't tell TRANSCOM
Microsoft to patch ASP.NET mess even if you don't
We know what's good for you, because we made the mess says Redmond
NORKS ban Wi-Fi and satellite internet at embassies
Crackdown on tardy diplomatic sysadmins providing accidental unfiltered internet access
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Protecting users from Firesheep and other Sidejacking attacks with SSL
Discussing the vulnerabilities inherent in Wi-Fi networks, and how using TLS/SSL for your entire site will assure security.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.