Cisco defrauder sentenced to 4 years

Daly collected classic cars with ill-gotten replacement parts gains

A Massachusetts man was sentenced to four years in prison for defrauding Cisco out of $15 million, the latest in a regular string of selling-replacement-Cisco-parts-for-profit schemes.  This perp, Michael Daly, president of Data Resource Group in Salisbury, MA., even had the audacity to acquire a fleet of classic cars with his ill-gotten gain.

Daly was found guilty of using fake business names and addresses in at least 39 states to make about 700 false claims of defective products for which Cisco sent replacements. After getting the replacement products, Daly sold them to other resellers for profit.

Daly engaged in this scheme from 2003 until 2007, when he was apprehended by the FBI, according to this article in the San Jose Mercury News. Daly carried out the fraud more than 1,300 times, obtaining equipment with a list price of $995 to $25,000 each time, according to the Mercury News.

The cumulative total of his illegal transactions was $15.4 million. The parts Daly returned to Cisco - when he actually did return parts -- under the SMARTnet replacement program were worth little or nothing at all, according to the Mercury News story.

The FBI began surveillance of Data Resources Group in 2006 and found nothing indicating that it was a computer parts business, according to the Mercury News:

Agents reported that DRG appeared to be a car repair and restoration shop and observed about 30 classic automobiles around the business and noticed several employees, including Daly, dressed in coveralls and doing repair or restoration work on the cars.

Daly pled guilty in 2009 to wire fraud and money laundering.

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