Two Kansas men are accused of buying counterfeit Cisco Systems products in China, then selling them to customers in the United States. The men allegedly put fake Cisco labels on the products, packaged them in counterfeit Cisco boxes and even shipped them with false Cisco user manuals.
Two Kansas men are being
accused of selling counterfeit networking gear they claimed was from Cisco
Systems.
According to a Dec. 3 news release from the Department of Justice,
Christopher Myers, 40, and Timothy Weatherly, 27, both of the Kansas City,
Kan., area, are facing "one count of conspiracy, 30 counts of trafficking
in counterfeit goods and one count of trafficking in counterfeit labels"
in connection with a scheme that federal investigators say stretched from China
to the United States.
According to documents from the U.S. Attorney General's Office in Kansas,
Myers in 2003 created a business called Deals Express. Two years later,
Weatherly established a company called Deals Direct. Through their businesses,
the two would allegedly buy counterfeit Cisco-branded computer hardware built
in mainland China
and Hong Kong, put counterfeit Cisco labels on it,
package it in counterfeit Cisco boxes and sell it with counterfeit Cisco
manuals.
The hardware components-including network cards and connectors-were sent
from China to
addresses in Kansas as well as UPS
stores in Seattle and Portland,
Ore., according to federal investigators.
In 2005, Weatherly, after creating a Website for Deals Direct called Direct2technology,
reportedly began selling the counterfeit Cisco products on eBay.
Authorities began seizing shipments of the counterfeit products in 2005 in Los
Angeles, Louisville, Ky.,
and Wilmington, Ohio.
According to the DOJ, Myers and Weatherly would make suggestions to their
Chinese suppliers on how to make the products appear more authentic. When
investigators seized some goods, the two began changing the ways their products
were shipped, including having them shipped to an address in Portland,
Ore., and having goods shipped through
other countries, such as Sweden.
Prosecutors said they estimate that the two men made about $1 million from the
fraud. If convicted, each man faces five years in prison and a $250,000 on the
conspiracy charge and 10 years and a $2 million fine on each trafficking count.
The case was investigated by Immigration and Customs Enforcement and the
FBI.
The Kansas case comes less
than three months after a North Carolina
couple and another man were charged with running a scam that stole
$23 million from Cisco through their company, which was called Synergy
Communications.
In that case, Mario and Jennifer Easevoli and Jason Allan Conway allegedly
took advantage of Cisco's Smartnet service, which lets users receive advance
replacement parts without the users being asked to first return the failed
part. Investigators said the three would then sell the replacement parts on
what "the grey market" and deposit the payments in a Synergy bank
account.
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