Cisco Reseller Network Genesis Indicted for Selling Counterfeit Gear

CRN reports that the owner of San Jose, Calif.-based Network Genesis, a Cisco reseller, has been charged with fraud for allegedly selling millions in counterfeit and stolen Cisco kits. As per the report, the owner of the reseller company Cuong Cao "Calvin" Dang faces charges on multiple counts of fraud. In fact, according to the networking equipment giant’s indictment filed with the U.S. District Court of Northern California, the charges are for selling counterfeit or stolen Cisco merchandise between January 2006 and January 2013.

The report highlights the federal grand jury allegation, which shows that Cuong Cao Dang, also known as Calvin Dang, bought imitation hardware for his company and then altered the external serial numbers to make it look like authentic Cisco gear. In addition, the document states that the Network Genesis owner also bought Cisco products from staff members and used their office discount as a partial profit margin.

According to the San Jose Mercury News, the profits were used to purchase an 11-property commercial and residential real-estate portfolio in San Jose, pay college funds for Dang's children, and buy luxury cars including a $100,000 Mercedes-Benz. The report shows that the Cisco reseller generated about $37 million in sales between 2006 and 2012.  This is the period when the alleged fraud took place.

As per the report, Dang is being charged with conspiracy to commit charges of mail fraud and money laundering. Consequently, the prosecutors are seeking for jail time, in addition to a fine of $37 million. The report indicates that the Network Genesis site is down, and the company phone number is not in service.  

In an email to CRN, a Cisco spokesperson wrote, “We are grateful for the efforts of law enforcement, and we have been working closely with them throughout this investigation." Cisco said the company will continue to cooperate with law enforcement as necessary.

The report indicates that this is not the first time the networking equipment giant had to deal with fraud. "Like many successful companies in the Silicon Valley, Cisco has been the victim of a variety of criminal schemes, including counterfeiting and theft," said Cisco.