Monday, May 17, 2010

Federal Agents Seize $143m in Fake Networking Equipment

Federal Authorities Seize Bogus Internet GearOver the past 5 years Federal authorities have seized more than $143m worth of counterfeit Cisco hardware and labels in a coordinated initiative called Operation Network Raider. The operation depends on the collaboration of several law enforcement agencies including the FBI, Immigration and Customs, and Border Protection Agencies which has so far resulted in more than 700 seizures and 30 felony convictions. Despite costing Cisco and other US networking enterprises millions of dollars in sales and technology, the real threat of these counterfeited routers and networking gear is on the level of national security.

In 2008, Ehab Ashoor attempted to traffic 100 gigabit interface converters that were illegally manufactured in China and contained fraudulent documents indicating they were genuinely produced by Cisco. The equipment was destined for the United States Marine Corps and was intended to be used as communication equipment in Iraq. This month Ashoor was sentenced to 51 months in prison and ordered to pay Cisco $119,400 in restitution after being found guilty of trying to sell the counterfeit gear to the US Department of Defense. In January 2010 a Chinese resident was sentenced to 30 months in prison and ordered to pay a restitution of $790,683 for trafficking counterfeit networking gear.

The prospect that our government and business networks may be at risk has propelled law enforcement agencies to work around the clock to crack down on these illegal distribution networks of bogus routers and switches. According to the Customs and Border Patrol there has been a 75 percent decrease in seizures of counterfeit networking hardware at U.S. borders from 2008 to 2009. Yet it is entirely possible that these scams could threaten national security as well as the financial well being of corporations by infusing critical networks with gear that is unreliable, or worse, riddled with backdoors and security vulnerabilities.

China has a well known reputation for doing whatever it takes to get the competitive edge and it has already been proven do–able by researchers at the University of Illinois that such vulnerabilities could be hardwired into a microprocessor. This hacked microprocessor could then log passwords and monitor networking traffic as well as other sensitive data passed through the equipment. However, Cisco has assured us that so far there is absolutely no evidence that such equipment has been tampered with on any scale to contain backdoors, but it is not entirely out of the realm of possibility.

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