[HN Gopher] Florida Tech CEO Indicted for Selling $1B Worth of C...
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       Florida Tech CEO Indicted for Selling $1B Worth of Counterfeit
       Cisco Equipment
        
       Author : boeingUH60
       Score  : 117 points
       Date   : 2022-07-08 20:45 UTC (2 hours ago)
        
 (HTM) web link (www.justice.gov)
 (TXT) w3m dump (www.justice.gov)
        
       | JoeAltmaier wrote:
       | Strange - charged with one or two counts of this and that. And
       | not 10's of thousands of counts. Is that normal?
        
         | wmf wrote:
         | Yeah, prosecutors generally charge only counts that they can
         | really prove and only enough counts to put someone away for a
         | "reasonable" time. Imagine a jury having to listen to evidence
         | for a thousand counts, keep them straight, and decide each of
         | them at the end.
        
       | silisili wrote:
       | One thing I always try to remember is not to buy or sell
       | electronics in Miami.
       | 
       | Every time a "person" from Miami has purchased a device from me
       | online, it turned out to be the address of some shady
       | forwarding/shipping company. They take forever and lose things,
       | so the actual buyer may file a claim they never got the item.
       | Thankfully, Swappa caught on and put some rules in place
       | recently. Basically, the buyer must disclose this, and once it's
       | delivered to said forwarder, the transaction is done.
       | 
       | Every time I've purchased a phone from a seller in Miami, it's
       | been fraudulent in some way. Typically, phones being sold as new
       | that have very obvious pry marks near the screen.
       | 
       | Beautiful city, but something about it seems to attract the
       | shadiest businesses.
        
         | walrus01 wrote:
         | a city with a large portion of its development built on
         | laundered cocaine money and the drug import trade has many
         | shady businesses?
         | 
         | [surprisedpikachu.gif]
         | 
         | I'm sure all that money buying all of those $500,000+ yachts
         | from south florida yacht dealers is _totally legit_
        
         | what-imright wrote:
         | Have to second this. I've bought a great deal of electronics
         | from Miami, and most were counterfeit, misrepresented or simply
         | unrecoverable, damaged. To me any Florida company is
         | disqualified for business now.
        
         | kmacdough wrote:
         | Minimal regulations, but more importantly, practically zero
         | enforcement. I remember a local electrician saying stuff like
         | "ah just don't tell anyone and it'll be fine". I was utterly
         | unsurprised, if devastated, when the apartment complex
         | collapsed.
         | 
         | It's best to keep regulations lean and manageable, so we don't
         | waste tons on unnecessary work and triple-checks, but
         | regulations they exist for a very good reason.
         | 
         | Anyone who claims "regulations" are anti-business forget that
         | business aren't the core of countries OR economies. People are.
         | The only people who benefit from deregulation are the ones who
         | own the businesses.
        
       | SamuelAdams wrote:
       | I think this highlights a larger problem with technical
       | equipment. Why is it still so difficult for end users to verify
       | if hardware they purchased is genuine?
       | 
       | Most PC manufacturers have some sort of sticker / device ID that
       | you send to their website. That isn't perfect but it is an
       | attempt. Are there other software based solutions that do a
       | better job of solving this problem?
        
         | wmf wrote:
         | Maybe customers don't want to know.
        
       | chx wrote:
       | Explain to me how you can counterfeit Cisco equipment. I truly
       | don't get it. I might be naive but I would have thought they have
       | custom ASICs in their products and then where are you going to
       | get them if not from Cisco?
        
       | lowlevel wrote:
       | Wonder if Rogers bought any.
        
       | hash872 wrote:
       | Marginally related but I've always wanted to discuss this- I met
       | a guy whose small business (he claims) is purchasing networking
       | equipment from the same Chinese factories that manufacture
       | Cisco/other networking company products. He told me that he
       | obviously just purchases in much smaller amounts, slaps his brand
       | on it, and then has a small number of salespeople sell them
       | throughout the US (he claimed to specialize in school districts
       | and universities). He said his prices were lower than Cisco's (or
       | other companies) because he has much less overhead. I think he
       | was born in China, so he may have an in with whoever these
       | factories are, possibly via personal connection.
       | 
       | I can't verify some of his story, but he does legitimately run a
       | small, closely held business selling networking gear. And he is
       | clearly wealthy. Would be sort of a cool business hack if true!
        
         | rconti wrote:
         | He's probably not just selling stolen hardware designs, he's
         | probably also selling illegally copied software!
        
         | zamadatix wrote:
         | Most network vendors have at least some quantity (usually a
         | significant portion of their volume, some completely) of their
         | hardware sourced from Broadcom, Qualcomm, and/or Mellanox (now
         | Nvidia) gear they slap in their physical chassis. There are a
         | few exceptions (Intel has Tofino, Cisco/Juniper/Aurba design
         | some products or pieces of products in house, and a lot of
         | smaller Fortinet Firewalls are their custom NPU/SPUs without
         | merchant silicon in front) but overall common gear comes
         | includes a common base. Outright stealing a full chassis design
         | and sticking your logo on it would be outright wrong but just
         | ordering the main components to be assembled in a factory like
         | the other network vendors isn't a hack it's just how that
         | business is done.
         | 
         | Of course the hardware isn't usually where differentiation
         | comes from, especially for school and university type
         | deployments, and the default software e.g. Broadcom will
         | provide is outright dogshit. Going back to the above having an
         | unauthorized copy of a box and selling unauthorized copies of
         | the 3rd party software would be extremely wrong and illegal but
         | just running with the default software or loading whitebox
         | software and selling services for it is the standard way of
         | doing things (unless you're a
         | Juniper/Cisco/Aruba/Extreme/Fortinet sized company in which
         | case you might make your own NOS).
         | 
         | Sometimes vendors will be willing to go into custom logo
         | agreements directly, e.g. you are an ISP and use Nokia boxes in
         | your deployment but want them to have your ISP's logo on the
         | box and software page instead of Nokia's, but generally you
         | don't get an extremely wide margin on this type of agreement,
         | especially if it includes selling to 3rd parties, you get more
         | like a standard VAR level discount. There are also "whitebox"
         | vendors that handle the "get the merchant silicon into a
         | complete hardware solution" portion but don't cover the "and
         | sell it with network software or support" half, leaving that to
         | standard VARs.
         | 
         | Long story short the situation was either poorly explained and
         | the business functions more as a typical network VAR (which is
         | definitely a place where you can make good money) or it was
         | actually explained well but isn't a "business hack" just
         | unethical and illegal.
        
         | ethbr0 wrote:
         | If "business hack" = stealing someone else's designs, I've got
         | a lot of profitable opportunities for you...
        
         | duxup wrote:
         | The buyers must know. The quirks / bugs of various networking
         | companies equipment is well known.
         | 
         | I wonder if the buyers are possibly defrauding their
         | employers...
        
           | newsclues wrote:
           | Of course they are.
        
         | bastawhiz wrote:
         | > because he has much less overhead.
         | 
         | Well, when you're selling hardware that you can't support
         | because it's pirated or fake, you do tend to have less
         | overhead.
        
       | trhway wrote:
       | > Customers of Aksoy's fraudulent and counterfeit devices
       | included hospitals, schools, government agencies, and the
       | military.
       | 
       | the places where IT is far from the best to say the least, and
       | bureaucracy is the strongest. Natural "marks" for such a con.
        
         | thret wrote:
         | If you sell devices secretly modified in China to the military
         | and it comes out that you knew about it... I wonder if this
         | constitutes treason?
        
         | rconti wrote:
         | It's almost as if always chasing the low bid has consequences!
        
       | colechristensen wrote:
       | Perfect way to introduce malware into foreign networks: release
       | modified pirated Cisco software for counterfeiters
        
         | the_biot wrote:
         | Don't knock it as a business model: cloned hardware and pirated
         | Cisco software is how Huawei got their start in the networking
         | business. I don't know if they did malware/spyware in the
         | beginning, but the assumption that they do now has caught up to
         | them though.
        
         | Lammy wrote:
         | That's probably why the Justice Department are so keen to go
         | after these grey-market sellers: it protects NSA's own
         | interdiction pipeline more than it protects Cisco's bottom
         | line: https://arstechnica.com/tech-policy/2014/05/photos-of-an-
         | nsa...
        
       | tendstofortytwo wrote:
       | Headline made it sound like the CEO of the Florida Institute of
       | Technology. Which... didn't make a lot of sense, but worth
       | pointing out that "Tech" modified "CEO", not "Florida".
        
       | [deleted]
        
       | imglorp wrote:
       | Here's one argument against building your own infra on prem.
        
         | alar44 wrote:
         | Lol yup that's why I only use cloud for my L2 switching.
        
           | gerdesj wrote:
           | I have a member of staff in the cloud with a torch and a pair
           | of binos. Back in the office we have the same setup. We run
           | at half duplex and avoid all that CSMA thing for speed. We
           | have shrunk the address part of the Ethernet II frames to one
           | bit and removed quite a few flags. With some extra
           | compression, we can do nearly one frame every few minutes,
           | depending on how often you have to look up our extensions
           | designed to save time.
           | 
           | To wind up the troops, I run nmap scans every now and then
           | from my PC. It takes days to complete. lol.
        
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       (page generated 2022-07-08 23:00 UTC)