U.S. Secret Service busts $5.7 million Cisco scam on eBay

By Brad Reese on Mon, 12/10/07 - 1:52pm.

California's Orange County Register is reporting that the U.S. Secret Service has busted a $5.7 million scam on eBay selling illegally obtained Cisco replacement parts.

Placentia, California resident - Thong Quoc Tran - has been arrested by U.S. Secret Service agents for allegedly filing more than 1,000 phony warranty claims on Cisco routers.

According to an affidavit by Special Agent Steven Kulpaca, Tran would obtain the serial numbers of routers legally purchased from Cisco by companies around the country.

Tran would then buy warranties on those routers, claim they were broken, and resell the replacement parts sent by Cisco at a discount on eBay.

The affidavit says Tran received $5.7 million in Cisco replacement parts over three years.

Tran was charged with mail fraud, Thom Mrozek, a spokesman for the U.S. Attorney's Office, said Friday, December 7th.

The Secret Service, which investigates cases of mail fraud, began surveillance in April of Tran, 30, who has homes in Placentia and in Westminster, California.

The agency conducted a search of his primary residence in the 400 block of North Little Drive in Placentia, California last week.

Wayne Williams, deputy special agent in charge of the Secret Service's Los Angeles office, said that, for one-target fraud cases, this is "one of the larger Orange County cases in its history."

Williams said only Cisco appeared to be targeted by Tran.

According to the affidavit, Tran would have Cisco replacement parts sent to dummy companies at various addresses – including his primary and secondary residences and three P.O. boxes he took out in Placentia, Yorba Linda and Brea, California.

After Tran sold the illegally obtained Cisco replacement parts on eBay, he would mail them to the buyers from various addresses, including his sister's house in Corona del Mar, California, the affidavit says.

"It's a simple scheme that worked in this case, but it's not particularly complex," Williams said.

Tran appeared in court Nov. 30 and posted $50,000 bail. His next scheduled court date is Dec. 20.

Special Agent Kulpaca worked with Cisco service abuse investigator Tim Walker, who tipped off the Secret Service about suspicious activity. Walker declined to comment.

Individuals and companies involved in Cisco SMARTnet fraud who wish to turn themselves in or cooperate with law enforcement should contact the Federal Bureau of Investigation at 408-369-8900.

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