Florida Tech CEO Indicted for Selling $1B Worth of Counterfeit Cisco Equipment
justice.gov
justice.gov
Every time a "person" from Miami has purchased a device from me online, it turned out to be the address of some shady forwarding/shipping company. They take forever and lose things, so the actual buyer may file a claim they never got the item. Thankfully, Swappa caught on and put some rules in place recently. Basically, the buyer must disclose this, and once it's delivered to said forwarder, the transaction is done.
Every time I've purchased a phone from a seller in Miami, it's been fraudulent in some way. Typically, phones being sold as new that have very obvious pry marks near the screen.
Beautiful city, but something about it seems to attract the shadiest businesses.
[surprisedpikachu.gif]
I'm sure all that money buying all of those $500,000+ yachts from south florida yacht dealers is totally legit
It's best to keep regulations lean and manageable, so we don't waste tons on unnecessary work and triple-checks, but regulations they exist for a very good reason.
Anyone who claims "regulations" are anti-business forget that business aren't the core of countries OR economies. People are. The only people who benefit from deregulation are the ones who own the businesses.
Regulations are a tool. Useful as hammers, but just as painful if applied incorrectly.
At least at the local level if something is insanely broken you can have action to correct it. But getting a law to do anything at the federal level is almost impossible unless you fill it with pork for every lobbyist in the DC zip codes.
You: "Let's get rid of all laws and regulations then!"
btw, graeber/wengrow research has found that it's historically inaccurate to say that all this is necessary or inevitable in larger society
Without that, proposed alternatives are great for thought provoking theoretical and philosophical consideration, but are without much utility when it comes to replacing what we have. The system we have now is largely failing us, but it can be carefully reformed into something a bit better. Throwing it out and replacing it with something entirely other isn't something I'd support without knowing exactly what we'd be getting ourselves into and that means seeing it (or something very close to it) at work.
This was the literal collapse of the Surfside condominium!? Wow.
'great deal'? Why keep buying if you knew they were bad?
It happened few times at my hotel. One time we told the FedEx that the package is not here and ask thme to leave the prepaid label. I googled the address, and found few snippets, reviews & complained about unauthorized purchases and shipments to that address.
This sounds... abusable. Why should I take the risk of porch piracy, for example, if the FedEx driver will do it for me?
I doubt the FedEx driver would take a package if it’s obviously not meant for pickup (e.g. if it already has a label on it for delivery to that address).
Sure, but isn't that what's happening here? A package addressed to ABC at hotel XYZ is picked up by the carrier, relabeled, and delivered to another location where the thief can pick it up? I must be misunderstanding the scam.
I also don't understand why the merchandise isn't just shipped straight to Miami. The thief obviously won't have it forwarded from the hotel to his/her own house, and sending it to a hotel first isn't going to fool law enforcement for very long.
Hotels are generally cooperative: If you call a hotel and tell them that you incorrectly sent a package to their address (maybe you ordered it months ago when you were staying at the hotel but the package was held up in customs) and need them to forward it to your home address, they will oblige. If you directly pay the carrier to pick it up instead of paying the hotel to re-mail it, they have even fewer reasons to ask questions.
Sure the hotel could try to verify whether you really stayed there but that’s not easy and would annoy real customers who didn’t pay for the room and don’t have their name on the bill. Either way the hotel isn’t taking any risks (beyond the nebulous “liability” that you can’t avoid unless you live in a padded cell)
Oh and LEOs don’t care about $1k scams. The thief is likely much more concerned that one of their victims will show up at their house and gun them down. Recall that half of all Americans live in a home with at least one firearm. That’s the only reason why thieves hide their addresses.
CamperBob2 creates a FedEx pickup order.
CamperBob2 calls hotel saying that his plans got changed but he had ordered something that would be delivered to the hotel. And ask hotel to hand it FedEx pickup driver. CamperBob2 didn't have a reservation at the hotel.
The hotel hands the package to the FedEx pickup driver.
I am not an expert on how this scam works. But it happened two times. Usually, when we get something that is not in our name, we look it up to see if the guest is already in the house, and coming. The first few times we handed a few packages to FedEx with a name whom didn't have any reservation. As soon as we asked questions about it and held one package, it stopped. It started again after covid with the same pattern.
eBay and Amazon would refund them and deduct it from me even when the tracking showed delivered.
I finally got fed up and decided one day to try adding signature confirmation to see what happens. Never lost the case again.
I didn’t realize at the time (late 90s) that cashiers checks can take 60 days to settle. I was really sweating it for a few weeks, as most of my net worth at the time was tied up in that computer!
eBay needs to get sued over this. They are taking part in the scam, knowingly, and profiting from it.
Something about it? Lol it was the cocaine capital of the USA.
>Attracted to the shadiness that was there to begin with.
Why not quote myself here?
See my other post about the pre-drug culture.
During the 1960's "drug culture" which coincided with the Vietnam War, increasingly large numbers of young people started rebelliously smoking cannabis which had always been available clandestinely in the bigger cities even after it had been taxed and criminalized since 1937.
Not so much in South Florida since there weren't nearly as many natives younger than 30, but northern influence was still strong along with affluent west coast surfers who sometimes outnumbered locals while visiting the disappointingly small waves of the nicely warm ocean.
Also in Vietnam many Americans stationed in the theatre were exposed to religious and medical cultures which had an unbroken history of traditional cannabis consumption, plus drugs like opiates.
In 1968 & 1969 pop music festivals began to proliferate, not even culminating at Woodstock, and were promoted and attended by the same culture who had become wary of toxic drugs through experience, but cannabis demand was ever growing.
Enterprising Califonia "hippies" had been smuggling as much cannabis as they could from traditional growing areas in Mexico like Acapulco and Michoacan, and this led to many more Mexican farmers getting involved in cannabis but adopting more hemp-like strains that could be cultivated at larger scale under poorer conditions.
Traditional hashish had been found in the middle east and Indian subcontinent, and was being smuggled from overseas, and about this time the Rastafarians of Jamaica began to be approaching limited recognition as a religious culture traditionally involved with cannabis, and under what was considered ideal growing conditions. Similar to Mexico, growth increased (but much faster) to meet demand, this time for the eastern US where the trend was a bit behind the west coast.
Mafia-type organizations were very strong distributors up north and prospered bigly along the whole supply chain before goods even arrived in South Florida. The average shipment from Jamaica was at least 4 or 5 tons per vessel on a "banana boat".
In 1974 English pop musician Eric Clapton visited Jamaica, and released a pop version of a song from local Rastafarian artist Bob Marley & the Wailers, recorded while Clapton was in Miami. This rapidly brought the Rasta culture to widespread recognition across the US.
By this time it was known locally that 4 to 6 of the 5-ton Jamaican cannabis vessels were simultaneously arriving to different obscure Florida ports per month, and it took a number of years before a few individual vessels were apprehended per year. This allowed organized crime to develop a very resilient, more vertical supply chain, from growth incentive given to farmers, until final distribution.
The DEA had also been newly formed, not admitting that its strategic purpose was to cut off Jamican supply as if it was an island, since that would be considered unsurmountable until the agency developed some clandestine strength of its own.
After a few more years apprehensions began to make a serious dent from Jamaica, and a much more ancient, traditional cannabis culture was located in Columbia which could be tapped by the same organized crime approach and smuggled in alternative ways. It's really not that far of a distance from Columbia to Miami by air, and the cannabis strains were more potent and sold for higher retail prices so it seemed like it did become economically sustainable for the air smugglers to begin with.
But if you're criminalized anyway, and you're going to fly from Columbia to Miami with contraband, there's a lot more money for every toxic kilo of cocaine that you bring instead of relatively harmless cannabis. Columbians were already traditionally growing the coca too, they just needed to be convinced to grow more. Much more it turns out.
And that's how the DEA started popularizing more cocaine to US consumers than they had ever dreamed of.
In 1977 Clapton then released his pop song "Cocaine".
Since then he unsurprisingly admitted to being affected by toxic substances.
By the early 1980's cocaine had risen from insignifigance to the biggest Florida industry in billions of dollars by many measures.
I use a freight forwarder to do most of my online shopping through Amazon, ebay and lots of other stores. I've bought everything from phones, TVs and even a standing desk.
It's a huge industry here. If you go to any warehouse district in Miami near the airport you'll find a bunch of these companies.
As a sidenote, I did some small development work for a friend that owns one of these companies. He was running a smallish operation and was making some good money.
There's a couple of software solutions for tracking, billing, ,support and CRM for those types of companies and they are absolutely abismal. There, I gave someone a business idea :)
In any event, I'm curious why it's cheaper to buy things from the US? Is it to do with tariff wriggling, or is business locally that inefficient? In that I mean, it seems some local company would realize they could import say a thousand Iphones, mark them up slightly, and make money while being cheaper than you paying to ship a single one from the US.
If I buy an imported product here I pay local sales tax, import tariff (indirectly) and the overhead of a local importer/shop. If I buy on ebay, especially if its second hand, I pay little to none of that.
(actually, in practice, the govt here has figured it out and sales tax and tariff are usually collected on incoming shipments - stuff acquired in person overseas are more or less not paid. Depending on your country ymmv.)
But local importer & retail alone can add plenty to the overhead, and hence retail price.
Of course buying from the US this way is still very expensive, the real value is in buying direct from China.
Unfortunately, I'm very familiar with the scamming culture around these parts as well:/
I doubt they care. The companies are probably mostly run by organized crime.
Later I freelanced, doing basically the same thing with laptops although I would limit myself to 5 per trip just in case the customs guys got curious (they never got curious).
The global economy is really screwy, particularly with import taxes factored into the equation. I still have friends who will buy insurance write-off cars in the US online, drive them south (often with an undriveable one in tow), fix them up (so that they are salable but not strictly roadworthy) and still manage to make a living.
Then there was the whole thing about Mexican gasoline (which is state subsidised) getting smuggled over the border and sold by roadside vendors by the gallon.
It really is the purest expression of the "free market" - any tiny arbitrage leads to a clandestine industry springing up. For a while there was a boom in smuggled fresh eggs.
And you can be sure that it's the friends of the government that does the most egregious import tax dodges
Rosero has a long and colorful résumé. Born in Florida to parents from Colombia, he served in the military, worked as a stripper and imported ponchos from South America. He started Think Expansion in 2017, employing a mix of friends and salespeople he found on forums. They helped generate leads and build social media accounts for any company that came calling: yacht merchants, medical billers, insurance companies, lawyers, influencers, even multilevel-marketing firms. He’s a born hustler whose personal hero is Jordan Belfort; his speech is peppered with a mix of marketing jargon (“lowering the action threshold”) and impressions of film and cartoon characters, sometimes in the same sentence. “My mission is to stop Dr. Evil at all costs!” he said in 2019 in an interview with a local news site. “Haha, something like that — I’m a digital entrepreneur.”
https://www.nytimes.com/2022/05/16/magazine/e-pimps-onlyfans...
Miami is its own world.
Florida has several distinct cultures within it. The "pure florida essence" is central Florida around Tampa and Orlando. Miami is a separate and distinct culture as are northern Florida (southern Georgia) and the panhandle.
These sorts of cultural distinctions exist in several states. Seattle is different than Spokane. The cultures of San Francisco, Los Angeles, Fresno, and Mendocino are all noticeably different. Texas has at least 6 subcultures represented within its borders. But Miami is different from the rest of the state (and country) to a degree that can be hard to appreciate unless you've lived there and have a good base of experience to compare it to.
It's a scammer's paradise. The general feeling seems to be that rules and laws are for suckers. The less you follow the rules, the better of a job you're doing. Silicon Valley often gets criticized for its disregard for the rules, but I've always found that disregard to be for rules they feel (fairly or not) are poorly formed, inefficient, or standing in the way of progress. In Miami you break rules as a form of virtual signaling.
Conspicuously consuming isn't just accepted, it's expected.
I would love to see a historian or anthropologist do a deep dive on how that culture got that way. I know that a lot of people will point to the cocaine trade but I think it goes deeper than that.
By this I mean the northern part of FL (for Caucasians) has by far a lot more confederate flags waving on pickup trucks, from unashamed racists, people who are serious about the birth certificate conspiracy theories about obama, and people who get really pissed when a monument to a conference general is town down.
As compared to the urban population centers in the south. It's more like part of MS/AL/GA.
The proximity of South Florida to the Caribbean islands may not be as significant as its proximity to the United States.
Miami is just an overgrown resort to begin with where you're still basically supposed to already have money before you go there. There is also the expectation that you will graciously go back home once the money you brought with you has been expended.
Woe be on the person who thinks they can just move there and make money working like any other US city. There are not that many legitimate sources of income. Traditionally, people don't ask what others do for a living, that would be considered rude and a major social faux pas.
There has simply never been enough jobs for the majority of people who have always found themselves needing some kind of income, so an incredible variety of alternative approaches have been engaged to separate money from those who earned it elsewhere.
And this has always been a big majority so the culture runs deep at all income levels.
Agriculture, retirement, tourism and real estate were always the main things, and the retirement, real estate & tourism "industries" prospered from people who made money elsewhere, so the agriculture was the main local thing that actually created wealth.
But the farmers and farming corporations can not create the amount of wealth equal to what crowds of incomers can bring with them, so development logically proceeds to an extent and gives rise to interesting real estate opportunities occasionally. Real money has been made subdividing the Everglades and there's plenty more of it out there.
Now there are actually lots of heavy industries and loads of smaller industries that truly do some manufacturing or add some tangible value to raw inputs, but by "lots" that means a very small percentage of the local economy compared to other states. Even Tampa or Jacksonville are incredibly more normal than South Florida and always have been, but they are quite limited in industrial work and more of a resort environment compared to other southern or northern cities.
Well anyone that can sell millions of dollars worth of networking gear could be financially successful without needing to do anything questionable at all, and personal greed in this one case may or may not have had the strongest influence.
There could also be the aspect of a businessman in Rome doing as the Romans do.
Miami is the only city where I've been offered cocaine randomly on the street. It's Shadytown, USA.
I can't verify some of his story, but he does legitimately run a small, closely held business selling networking gear. And he is clearly wealthy. Would be sort of a cool business hack if true!
I wonder if the buyers are possibly defrauding their employers…
Well, when you're selling hardware that you can't support because it's pirated or fake, you do tend to have less overhead.
Of course the hardware isn't usually where differentiation comes from, especially for school and university type deployments, and the default software e.g. Broadcom will provide is straight dogshit. Going back to the above having an unauthorized copy of a box and selling unauthorized copies of the 3rd party software would be extremely wrong and illegal but just running with the default software or loading whitebox software and selling services for it is the standard way of doing things (unless you're a Juniper/Cisco/Aruba/Extreme/Fortinet sized company in which case you might make your own NOS).
Sometimes vendors will be willing to go into custom logo agreements directly. E.g. you are an ISP and use Nokia boxes in your deployment but want them to have your ISP's logo on the box and software page instead of Nokia's, but generally you don't get an extremely wide margin on this type of agreement, especially if it includes selling to 3rd parties, you get more like a standard VAR level discount. There are also "whitebox" vendors that handle the "get the merchant silicon into a complete hardware solution" portion but don't cover the "and sell it with network software or support" half, leaving that to standard VARs.
Long story short the situation was either poorly explained and the business functions more as a typical network VAR (which is definitely a place where you can make good money) or it was actually explained well but isn't a "business hack" just unethical and illegal.
As for software, there are many vendors and open source projects that make complete distributions for these generic switches/chipsets.
One way to get an idea of the sheer number of devices in play here is to look at the hardware supported by ONIE, a small Linux distribution that is a de facto standard bootloader for these. Can't find a proper HCL for ONIE, but have a look at the source: https://github.com/opencomputeproject/onie/tree/master/machi... The number of models is staggering.
So what your friend does is clever as a business, but not necessarily even high tech or technically hard, nor does it need special connections. It's just a huge market, there for anyone to build a reseller business around.
Is this really the case? I worked on the Cat6k in the late 2000's, and it was definitely not a single chipset. Maybe it's different when you get to switches that can support 300+ ports.
I would argue this is even more pronounced on the lower end now, with I think mostly Marvell and Realtek chips.
Also illegal if selling stolen designs and software if true!
(A) Real products that are being sold on the black market, think of these as stolen from the factory. They're cheaper because nobody is paying the royalties.
(B) High quality knock offs that are made at the same factory with the same materials and tools. These might be slightly less well made.
(C) What you think of as fake. Just junk.
Most people encounter A and B without ever knowing it.
https://www.servethehome.com/fake-cisco-switches-in-the-supp...
That's a very 2001 way of product design - the vast vast majority of networking hardware (even the super expensive and complicated security stuff) uses off the shelf chips from Cavium (for CPU), Xilinx (FPGA), etc. packaged up in a manner optimized for it's purpose.
Almost nobody is spinning custom ASICs for network hardware these days - the cost/benefit over an FPGA just isn't there.
According to the indictment, the devices the Pro Network Entities imported from China and Hong Kong were typically older, lower-model products, some of which had been sold or discarded, which Chinese counterfeiters then modified to appear to be genuine versions of new, enhanced, and more expensive Cisco devices. As alleged, the Chinese counterfeiters often added pirated Cisco software and unauthorized, low-quality, or unreliable components – including components to circumvent technological measures added by Cisco to the software to check for software license compliance and to authenticate the hardware. Finally, to make the devices appear new, genuine, high-quality, and factory-sealed by Cisco, the Chinese counterfeiters allegedly added counterfeited Cisco labels, stickers, boxes, documentation, packaging, and other materials
Most PC manufacturers have some sort of sticker / device ID that you send to their website. That isn’t perfect but it is an attempt. Are there other software based solutions that do a better job of solving this problem?
the places where IT is far from the best to say the least, and bureaucracy is the strongest. Natural "marks" for such a con.
https://storage.courtlistener.com/recap/gov.uscourts.njd.498...
Also, when it is a Florida story, they tend to include the State name first in the title (i.e.: "Florida Man" stories) and not include it at all for some other states.
Per the actual deeds, the person earned a revenue of 100m from the equipment, with millions of profit gained from the sales.
The equipments' market price tag adds up to 1B. Which suggest authentic Cisco equipment is 10X the price.
I did not actually really everything, and don't know if the sold equipment is of lower quality. But just from the 10X price difference, I think Cisco needs to be disrupted...
If you're a small company, you have basically two options: the first is that you buy the big three equipment through a distributor with a lower discount.
The other way is to recognize that the vast majority of the modern switches -- even brand name ones -- have very similar hardware: they're basically an x86 computer with a Broadcom switching/routing chip bolted on through PCI-E.
Broadcom sells their chips on the open market, so you can get relatively cheap switch hardware from a less known vendor (FS, Quanta, Mellanox at least until recently), and install a networking operating system such as Sonic.
However, you'll be on the hook for supporting and debugging it yourself. There are intermediate options like using the switch's vendor operating system, but you probably won't get support at the big three level -- no next business day replacement, no TAC handholding (Not that the bar is too high.) This is a dealbreaker for many: you want your network to be solid, or at least have access to people able to quickly troubleshoot the arising issues. It's easy with Cisco, slighly less so with Juniper, and practically impossible with whiteboxes.
Basically, Cisco is the IBM of 1970s: nobody gets fired for buying it, and the only thing they should fear is accidentally disrupting themselves.
With the recent chip shortage, lead times on the big three gear shot up, so there is a prime chance for Chinese manufacturers (Huawei, H3C) to step up and fulfill the need -- at least outside of US and Europe.
Not so lovely built from these.
To wind up the troops, I run nmap scans every now and then from my PC. It takes days to complete. lol.