The Federal Bureau of Investigation’s Operation Cisco Raider recently recovered about 3,500 counterfeit network components (estimated retail value – over $3.5 million) that may have enabled hackers to access secure US government databases.

According to a New York Times article, there have been recent speculations about anti-aircraft systems being disabled during the first Gulf War, as well as when the Israeli Air Force attacked a suspected Syrian nuclear power plant. The speculations relate to the Federal Bureau of Investigation’s (FBI) Operation Cisco Raider – a two-year enforcement initiative that led to 15 criminal cases in which counterfeit products were bought and used by military agencies, military contractors, and electric power companies. The FBI suspects that the US military may have been using counterfeit computer chips in its systems, leaving it vulnerable to security breaches, information leaks, or worse. The components included pirated versions of Cisco Systems, Inc. routers, switches, interface converters, and wide area network interface cards.

Two months ago, top officials of the FBI, U.S. Immigration and Customs Enforcement (ICE), U.S. Customs and Border Protection (CBP), and the Royal Canadian Mounted Police (RCMP) announced the initial results of an ongoing US/Canada enforcement initiative that targets the illegal distribution of counterfeit network hardware manufactured in China. In total, authorities around the world have made more than 400 seizures of counterfeit Cisco network hardware and labels – with an estimated retail value of more than $76 million. By intercepting the counterfeit hardware at ports of entry and dismantling illegal supply chains in the U.S., the operation has achieved significant successes in protecting the public from the risk of network infrastructure failures associated with these counterfeits.

Over the last two years, the FBI’s portion of Operation Cisco Raider has involved 15 investigations across nine FBI field offices and the execution of 39 search warrants, identified approximately 3,500 counterfeit network components with an estimated retail value of over $3.5 million, and led to a total of ten convictions and $1.7 million in restitution.

Some of the cases involved with this initiative across the United States include the following:

• On February 14, 2008, in the Northern District of Georgia, Todd Richard was sentenced to 36 months' imprisonment and ordered to pay $208,440 in restitution to Cisco Systems, Inc. He was convicted of trafficking in counterfeit Cisco computer products – importing counterfeit Cisco computer components from China, counterfeit Cisco labels which he affixed to the parts, and selling the items on eBay.
• On January 4, 2008, in the Southern District of Texas, a federal grand jury returned an indictment charging Michael Edman and his brother Robert Edman with trafficking in counterfeit Cisco products. They allegedly imported the counterfeit Cisco computer network hardware from China and later sold them to computer network products retailers in the US, as well as to the Marine Corps, Air Force, Federal Aviation Administration, FBI, defense contractors, universities and financial institutions.
• On April 17, 2007, in the Northern District of Texas, Mark Thomas Geis was sentenced to five years in prison and ordered to pay $1.5 million in restitution to Cisco Systems, Inc. He was convicted for conspiring to traffic in approximately $4.2 million of counterfeit Cisco hardware.

For their part, ICE and CBP opened a total of 28 investigations in 17 separate field offices since 2005, eight of which were worked jointly with the FBI and several with the RCMP. ICE has netted 115 seizures of counterfeit Cisco products (estimated retail value $20.4 million), six indictments and four felony convictions. CBP has made 373 seizures of counterfeit Cisco network hardware since 2005, and 40 seizures of Cisco labels for counterfeit products. Total ICE and CBP seizure results: more than 74,000 counterfeit Cisco network components and labels with a total estimated retail value of more than $73 million. Meanwhile, the RCMP seized 1,600 counterfeit Cisco computer parts (estimated value $2 million).

An unclassified FBI PowerPoint presentation made to another government agency, which made its way to the Web, showed the expanse of the far-reaching investigation, as well as the concerns it has generated. The presentation depicted cases in several US states and counterfeit components moving from companies in China to the US government through distributors in the US, Canada, Germany, the UK and the Netherlands. Counterfeit routers were sold for as little as $234 each, compared to $1,375 for the genuine Cisco part.

But the real concern is not just that the US government and defense contractors were getting cheap, low-quality, system failure-prone Chinese imitations instead of top-notch Cisco products. It’s that, as an article by Pierre Thomas and Jason Ryan on ABC News stated, phony computer hardware could serve as “some sort of Trojan horse that can be manipulated by hackers to steal sensitive information.

According to Julie L. Myers, Homeland Security Assistant Secretary for ICE, "Crimes like these threaten international commerce, national security and the very safety of our citizens… Throughout this investigation, the cooperation and partnership that we received from Cisco Systems, our law enforcement colleagues, and Chinese counterparts are a clear example of the results that can be realized through industry, interagency and international cooperation."

Let us all hope so. The investigations are ongoing throughout the U.S.