Yesterday, 41 year old Michael Kyereme a/k/a "Michael Appiahkyeremeh" of Piscataway - New Jersey, pled guilty to charges of mail fraud and tax evasion.
In his mail fraud guilty plea, Kyereme admitted defrauding Cisco out of $6.9 million in replacement parts by scamming the Cisco SMARTnet Service program.
Here is how Kyereme's SMARTnet scam worked:
As an independent contractor hired to provide information technology support to the City of Newark, Kyereme was responsible for assisting Newark employees when computer problems arose that required technical support or trouble-shooting by a computer technician.
If it was determined that a computer related problem could not be solved without outside assistance or a replacement part, Kyereme was authorized to contact Cisco for technical assistance and if necessary, to request a replacement part under Cisco SMARTnet.
Starting in January 2003, Kyereme would falsely claim that certain Cisco parts in the City of Newark's computer systems were malfunctioning and thus required replacement.
In response to those numerous requests, Cisco sent approximately 280 replacement parts to Kyereme on behalf of the City of Newark.
Instead of installing the parts into the City of Newark's computer system, Kyereme would sell the parts to a third party in California, pocket the illicit proceeds and return parts of lesser value to Cisco.
In all, Kyereme failed to return 148 parts to Cisco and of the approximately 132 parts that he did return, only 33 of those parts matched the type of part originally sent by Cisco to Kyereme.
Kyereme did not dispute that on or about November 7 - 2006, he requested a replacement part for a one-port optical card, falsely claiming that the part in Newark’s computer system was not responding to his trouble-shooting efforts.
According to the information to which Kyereme pled guilty, Cisco then sent Kyereme via Federal Express a replacement part of the exact type alleged to be inoperable – a working one-port optical card, with a commercial value of approximately $260,000 and Kyereme returned a different part – an eight-port adapter worth approximately $2,000.
It is interesting to note that upon his arrest by the Federal Bureau of Investigation on March 2 - 2007, Kyereme had $3 million in stolen Cisco parts stashed within his home and car.
Kyereme faces a statutory maximum penalty of 20 years in prison on the mail fraud offense and a fine of up to $250,000.
In his tax evasion guilty plea, Kyereme admitted that on or about April 15, 2007, he filed a fraudulent personal tax return, with the IRS, which stated that his taxable income for the calendar year 2006 was approximately $81,494 and claiming a refund of approximately $4,034 was due to him.
In fact, Kyereme admitted his tax return failed to report $1,242,483 of income in 2006 that he illicitly derived from the sale of stolen Cisco parts.
He also admitted that an additional tax of approximately $429,826 was due the United States.
Kyereme also admitted that he filed personal income tax returns with the IRS for 2003, 2004 and 2005, which understated the amount of taxable income he received for those calendar years.
Additionally, he admitted that for tax years 2003 through 2006, a total additional tax of approximately $669,234 was due the United States.
He faces a statutory maximum of 5 years in prison and a fine of up to $100,000 for the tax evasion offense.
Sentencing is scheduled for November 5th - 2008, meanwhile Kyereme remains free on electronic monitoring and a $500,000 bond secured by five properties.
View the United States of America vs. Michael Kyereme
Since he is currently free on bond, do YOU think Kyereme will still be around come sentencing time this November 5th?
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Brad Reese cofounded BradReese.Com Cisco Refurbished which offers one year warranties on Cisco Refurbished and Cisco Repair.
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