Mention counterfeit products and most people think of fake Rolexes, imitation Coach bags, and bootlegged DVDs. Mention counterfeits in information technology, and CIOs and IT managers might think of routers.
Apparently, counterfeit switches and routers have become a big problem, especially in government markets, according to recent reports.
For example, last May, the government convicted two people in the Washington, D.C., area -- Chun-Yu Zhao and Donald H. Cone -- of running a sophisticated scheme to import and sell counterfeit Cisco-branded computer networking equipment. Authorities say Cone, Zhao, and Zhao's family members in China manufactured and fraudulently labeled millions of dollars in fake Cisco equipment for sale in the US. The equipment was manufactured in Hong Kong by Han Tong Technologies and sold in the US through a Virginia-based company called JDC Networking Inc. The government said it seized more than $143 million worth of counterfeit equipment when it arrested Cone and Zhao, who were apparently leading sumptuous lifestyles. The court ordered Zhao to forfeit several homes and condos in the D.C. area with a combined worth of $2.6 million, two Porsches and a Mercedes, and seven bank accounts worth more than $1.6 million. That was on top of Zhao's sentence of three years in prison and being stripped of US citizenship.
And in Kansas last year, two men were convicted of trafficking in counterfeit goods through a business called Deals Direct. According to the US Attorney's office, the men were using fake Cisco labels, boxes, and manuals and were somehow obtaining access to Cisco's "confidential serial number verification Web site" to get legitimate serial numbers. They sold the equipment on eBay and through their own website.
I don't know why all the news about counterfeits focuses on Cisco products. Government press releases routinely refer to the fact that they are investigating all hardware counterfeits, but the only brand name they seem to mention is Cisco. Perhaps it is because Cisco is so dominant in this market. Like Rolex in high-end watches, Cisco may be the brand to copy in networking equipment. But according to at least one press account, Zhao's JDC Networking also advertised new and used products from Juniper Networks and Extreme Networks.
Another, perhaps more important question: Why aren't we hearing more about this from the commercial sector? I doubt that counterfeiters target only the government market. In fact, now that the DOJ has cracked down, counterfeiters might be selling even more of their goods to corporations. I wonder how many counterfeits of Cisco or other name-brand hardware are chugging along in corporate datacenters.
A couple weeks ago, Cisco's senior vice president in charge of government sales told NextGov.com that his company has come up with a tool that automatically detects imitations of its branded products. The tool seems designed to address the problem in the government market, but could likely be used in commercial markets as well.
I wonder if it will. Presumably, Cisco would give away the tool so customers could verify their equipment. Would corporations do this? Do they even care? Unlike the government, which is more concerned about counterfeits for national security reasons, corporate IT departments haven't seemed worried.
How about it, CIOs and IT managers? How often do you encounter counterfeit hardware? What due diligence do you do to make sure equipment is genuine? Would you use the new Cisco tool?
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— Tam Harbert is a freelance journalist based in Washington, D.C.