Cisco equipment counterfeiters face huge fines & jail time

The U.S. Department of Justice announced on Thursday that two accused computer hardware counterfeiters were found guilty of myriad charges stemming from the import and sale of fake Cisco equipment.

Cisco equipment counterfeiters face huge fines & jail time

According to a DoJ news release, Chun-Yu Zhao and Donald H. Cone were convicted of conspiracy to sell counterfeit equipment by a federal jury in Virginia on May 24th. Zhao was also found guilty of importation fraud, trafficking in counterfeit goods and labels, making false statements to law enforcement, making false statements in naturalization, money laundering and 10 other counts. The trial lasted nearly two weeks and the jury deliberated for four days.

Zhao and Cone, along with several of Zhao’s family members located in China, ran a fraudulent, “large-scale” business called Han Tong Technology Limited that implemented “a number of sophisticated schemes” to fool purchasers, according to evidence presented by prosecuting attorneys. The group used a dummy company called JDC Networking Inc. – ran by Zhao and headquartered in Virginia – to target American buyers by falsifying product packaging.

The sheer scope of the venture was matched only by Zhao’s now-seized assets: two Porches, a Mercedes, $1.6 million (spread out over seven bank accounts) and several homes and condos estimated to be worth nearly $3 million.

Neil H. MacBride, U.S. Attorney from the Eastern District of Virginia, commended ICE and other investigators who had a hand in nabbing the criminals “despite the numerous false names and addresses used by Zhao” to avoid criminal prosecution.

“Zhao’s days of taking in millions of dollars from unsuspecting U.S. consumers and businesses are over,” MacBride said.

The pair will be sentenced in August, where each faces steep fines and possible jail time. Zhao in particular could end up calling the inside of a cell her home for dozens of years; several crimes she was convicted of carry lengthy maximum sentences. The counterfeiter will likely end up paying millions as well.

“Intellectual property crime is a serious threat, and one that we are working hard with our law enforcement partners to fight,” said Lanny A. Breuer, Assistant Attorney General of the DoJ’s Criminal Division. “These guilty verdicts are strong signals to would-be counterfeiters and other intellectual property criminals that fighting these crimes is a priority for this Justice Department.”

Earlier this month, another Cisco-related counterfeit scheme made the news when two men – Iheanyi Frank Chinasa and Robert Kendrick Chambliss – were sentenced for their roles in a fake equipment scam. The pair attempted to pass off their own manufactured hardware as legitimate after reporting to the company that they were in possession of defective products.