Two Charged with Defrauding Cisco of $27M

A federal grand jury indicts two men on charges of tricking Cisco Systems into accepting counterfeit networking equipment in exchange for legitimate merchandise under the guise of a warranty.

Two men have been indicted on federal charges of defrauding Cisco Systems of more than $27 million in equipment.

According to a June 2 news release from the Department of Justice, Robert Kendrick Chambliss, 36, of Henrico, Va., and Iheanyi Frank Chinasa, 38, of Gaithersburg, Md., have been charged with "a single count of conspiring to commit mail fraud and nine counts of mail fraud" in connection with a scheme to trick Cisco into swapping legitimate merchandise for counterfeit goods.

Authorities believe "Chinasa manufactured counterfeit networking and telecommunications equipment" and tried to pass it off as legitimate products covered by Cisco's warranty. Contacting Cisco, Chinasa or Chambliss would "falsely [claim] that they were having trouble with a Cisco product," prompting Cisco to offer replacement parts in exchange for the supposedly defective product, the DOJ said.

To read more about counterfeit Cisco hardware, click here.

"Any attempt to defraud a company of millions in assets must face serious consequences," Neil MacBride, United States attorney for the Eastern District of Virginia, said in a statement. "We are grateful for Cisco's cooperation with the FBI to investigate this alleged scheme."

"The maximum penalty for the conspiracy count and each mail fraud count is 20 years of imprisonment, a $250,000 fine, full restitution and three years of supervised release upon completion of any prison sentence," the DOJ said.