Verizon Tech Charged In $4.5M Equipment Scam 104
McGruber writes "Michael Baxter, a 62-year-old man from Ball Ground, Georgia, was recently arrested and charged with multiple counts of fraud for allegedly placing false equipment orders. As a network engineer at the southeastern regional headquarters of Verizon Wireless, Baxter allegedly submitted hundreds of fraudulent service requests to Cisco. According to prosecutors: 'The service requests were fraudulent in that no parts needed to be replaced, and instead of placing the replacement parts into service in Verizon Wireless network, Baxter simply took them home and sold them to third-party re-sellers for his own profit.'"
I thought maybe he was... (Score:5, Funny)
Building routers 1 part at a time...
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Verizon network sucks? You either work for ATT, or live in a cave(which incidentally I am sure you could get a Verizon signal in).
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A word of advice for ya dude, If you drop the soap in the shower don't bend over to pick it up.
He's 62. ewww....
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The Idiot should have just sold the used parts
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Exactly! Maybe Verizon has a different relationship with Cisco, but every time I've ever had Cisco replace defective parts, they've always required the bad parts be sent back. In a few cases, the courier takes the defective stuff with him.
Re:I thought maybe he was... (Score:5, Funny)
"One Piece At A Time"
Well, I left Georgia back in '96
An' went to Verizon workin' on a orderin' gig
The first year they had me dialin' cisco up
Every day I'd watch them beauties roll by
And sometimes I'd hang my head and cry
'Cause I always wanted me an ap that could do it all.
One day I devised myself a plan
That should be the envy of most any man
I'd sneak it out of there in a dhl box in my hand
Now gettin' caught meant gettin' fired
But I figured I'd have it all by the time I retired
I'd have me a router worth at least a hundred grand.
[CHORUS]
I'd get it one piece at a time
And it wouldn't cost me a dime
You'll know it's me when I come through your boards
I'm gonna flood around in style
I'm gonna drive everybody wild
'Cause I'll have the only one there is a round.
So the very next day when I punched in
With my big dhl box and with help from my friends
I left that day with a dhl box full of asics
Now, I never considered myself a thief
VZ wouldn't miss just one little piece
Especially if I strung it out over several years.
The first day I got me some ports
And the next day I got me cpu and cords
Then I got me a big ass housing and all of the chrome
The little things I could get in my big lunchbox
Like the power unit and all of those IOS docs
But the big stuff we snuck out in my buddy's mobile home.
Now, up to now my plan went all right
'Til we tried to put it all together one night
And that's when we noticed that something was definitely wrong.
The housing was a '96
And the dsl modems turned out to be a '04
And when we tried to put in the ethernet all the holes were gone.
So we drilled it out so that it would fit
And with a little bit of help with an A-daptor kit
We had that pirate os bootin' just like a song
Now the terminals were truly seminal,
It could have been straight out of HAL
But when we pulled out the switch it booted to x.
The back end looked kinda funny too
But we put it together and when we got thru
Well, that's when we noticed that we only had 10GBE
About that time my wife walked out
And I could see in her eyes that she had her doubts
But she opened the door and said "Honey, connect me to Ravencrest."
So we flooded the boards just for giggles
And I headed her right on down to wow
I could hear everybody laughin' for realms around
But up there at the battleground they didn't laugh
'Cause to diagnose us up it took the whole staff
And when they got to see the ping it was minus twelve.
[CHORUS]
I'd get it one piece at a time
And it wouldn't cost me a dime
You'll know it's me when I come through your boards
I'm gonna flood around in style
I'm gonna drive everybody wild
'Cause I'll have the only one there is a round.
[Spoken] Ugh! Yow, CMD TACO
This is the IPSEC 6000 MODULE
In the SCA 30K Come on
Huh, This is the CIOSDIOS9999
And negatory on the cost of this mow-chine there CMD TACO
You might say I went right up to the client
And ordered it up, it's cheaper that way
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I'm glad I'm not the only one who immediately thought of that song.
Nice! (Score:1)
2. Pocket the part
3.
4. Resell it for a profit!
When he grows up. (Score:5, Funny)
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Big deal, a couple of routers. (Score:5, Funny)
The real crime here might be the price of Cisco equipment.
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greed kills (Score:4, Insightful)
If he wasn't so greedy, he probably could of gotten away with it.
A little here, a little there.
At least he got his woman some cosmetic surgery, she's probably going to need to find a new man.
Re:greed kills (Score:5, Insightful)
You got that right. It was a pretty good scam! If you keep it low profile enough, no one would have noticed. But with enough "failure reports" concentrated and centered around him, it obviously caused an investigation. Another problem in here is that Cisco didn't want the old equipment back? That's really odd. Not wanting the old equipment back was the hole which made it all possible I think.
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All companies don't want your old broken gear back. I have a dead TV here, Panasonic wont take it back when I but a new one. This is normal for 100% of all companies on the planet.
Re:greed kills (Score:5, Informative)
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Tell that to Dell!
They may not "want" the old gear back, but by requesting it back, they better guarantee that this type of fraud doesn't occur.
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True, I think both Dell and HP asked for their batteries back when we needed replacements.
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It is 10:30 and I can punch up UPS or FedEx online and get someone out here by noon too! Noon today, that is.
I wonder where you work. Where I work, if I call up UPS or FedEx or go into their system online (makes no difference) today, I'll be lucky to get someone out here by thursday to pick the damn thing up even if we paid for overnight - the only way to get true "overnight" is to take it direct to the central depot downtown as an "overnight" from one other suburb branches sits around in the suburb depot a
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For my reality: DHL > UPS = FedEx > USPS. UPS and FedEx are interchangeable, I've had the same issues (drivers not leaving attempted delivery tags, even missing packages because they were too fucking lazy to leave a contact tag for a package that required signature) with both.
UPS and FedEx are also MASTERS of lying out their asses, either pushing the doorbell once and running straight for the goddamn truck, or not knocking/ringing at all and just claiming they "attempted delivery" even if they never c
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Actually, they're all pretty bad about that. My favorite is the delivery note with nothing at all marked on it. At least that driver was smart enough to stick them in the door frame instead of hanging on the doorknob or relying on that sticky to hold it to a dirty door in the wind.
At the apartment, many times, but UPS and Fedex would just go straight to the office and unload everything. If you're lucky, you got a note as per above. But most of the time, if you weren't looking at the tracking info, you'd
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My favorite is the trick of leaving stuff under the doormat. Like the time I came home to the box my computer case shipped in under my front doormat.
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I replaced 2, 5 year old Dell servers last year and Dell did not ask for us to ship them the old servers.
In fact they did not even ask if we were replacing old servers.
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If by "but" you mean "bought," that would explain it, since warranty fraud isn't an issue.
I got a new TV from Sony last year on warranty and I assure you, the technician who brought out the replacement collected the old one. I guess the question who he returned it to, on up the chain.
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I and i wont say what but there was one case where the contractor took short cuts on a job that could have killed people.
Re:greed kills (Score:5, Insightful)
Knowing the failure rate of product lines this would have shown up as one supplier with a higher than normal failure rate. The trend continued which is most likely how the high failure rate was investigated. With the theft, the failure rate would start to show up as an outlier on any chart as an unusualy high loss. In a product with high failure rates, this would have been more difficult to detect. For example a few missing light bulbs is hard to detect as they are a high failure rate consumable item. A large amount of high reliability network devices would show up much faster as an unusual event.
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Yes but everything had a margin of error. If the failure rate is estimated to be 7% of the routers per year and it's actually something like 7.5-8%, no one is going to bat an eye on that. He could have made a very steady profit over many decades.
I think I'm learning the wrong lesson from the stories. Don't steal a lot - steal a little bit over a long time, and you probably won't get caught. =\
Re:greed kills (Score:5, Funny)
This happened in Milwaukee Wisconsin for downtown sporting events... people in full gear sold parking spots on the road and in city owned lots, then when it was full they took off with their money and the police followed ticketing every car for illegal parking in city lots...
turns out they were just guys with cones and lights...
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What you said might be true, on the other hand having sound internal control in your purchasing department is the critical factor here. Accounts Receivable and revenue are integrally connected in the accounting function. It is crucial for the company to have high level of segregation of duties, ensure rotations, required vacation time etc. If he got away with it long enough, its likely he knew the independent auditors thresholds for sampling. $40,000 sounds quite high though so that most likely means he
Re:greed kills (Score:5, Insightful)
I suspect this fell between the cracks of two companies.
Verizon presumablly wasn't paying for these parts (according to TFA they were replacements for suposedly failed parts under service contracts) so they probablly wouldn't have any purcahse orders or invoices for them.
Meanwhile cisco probablly didn't have information on what work each tech was doing so they could only check the reasonableness of verizons service requests as a whole, not the reasonableness of any one tech's actions.
Re:greed kills (Score:5, Interesting)
About a decade ago, a couple was running a similar scam at my job. She worked in sales as an order processor - basically the back-end of the sales process that initiates production orders. He worked in the repair department as a line manager. She would initiate a product order, and set it up with a genuine customer account, but a bogus "ship to" address. The product ($40k+ telecom test gear) would be manufactured and shipped, closing the loop on the production accounting end. UPS would try to deliver the product, but fail. It would be returned to the company as "undeliverable"
Manufacturing production was big enough that the float concealed the missing items. You'd have to reconcile the production, sales, shipping, and repair accounts to try to spot the anomalies. This scam persisted for a few years, slipping a couple of units out the door on an occasional basis. They finally got pinched when one of the phantom manufacturing units showed up on a repair order. It was fairly new, and the customer was attempting to get warranty service. Warranty repairs were handled by a different sales entry person, who couldn't resolve the actual sale of the unit to
They ran their scam too long. Had they moved somewhere else, I doubt any prosecution would have happened. Almost every bit of evidence would have been circumstantial. They got nailed because the Police observed them executing the scam, and grabbed them in the parking lot with the equipment in their possession. Best guess was that they swiped about $500k of equipment.
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I can't say that I was briefed on the specifics. I wasn't. However, I was told t
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hehe I just watched Taken [imdb.com]. Pretty decent and better than I expected.
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My bet is Verizon doesn't go out of business.
on the plus side.... (Score:5, Funny)
Obligatory (Score:4, Funny)
RMA System (Score:5, Informative)
When Cisco ships a replacement part under smartnet (service contract) or via a partner it comes looking for the part that was to be replaced. Normally I believe the limit is 30 days and then Cisco will look to charge the customer for the part.
How this guy could think that no one would come looking for all of this is fairly surprising.
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They had to of had a replacement contract where they were not required to return the broken part or Cisco was doing a very poor job of tracking.
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"had to HAVE had", shit for brains. "of", jesus....
Re:RMA System (Score:5, Insightful)
When Cisco ships a replacement part under smartnet (service contract) or via a partner it comes looking for the part that was to be replaced. Normally I believe the limit is 30 days and then Cisco will look to charge the customer for the part.
How this guy could think that no one would come looking for all of this is fairly surprising.
*Beginning at least as early as December 2006 and continuing until he was terminated by Verizon in May 2010, Baxter submitted hundreds of fraudulent service requests, prosecutors said.*
maybe their service contract was just better than usual. maybe he started doing it once he discovered that nobody really came looking for the parts. how much does that shit cost anyways? the bail was for 50k.
it doesn't mention how he was caught, could be as simple as cisco buying from these 3rd party resellers and following serial numbers to see how they got the parts, because I don't really think cisco likes 2nd hand market at all, they'd probably be much happier about keeping price discrimination in effect(or only lease/sell them on support contracts..).
anyhow he probably would have done better mileage if he had sold the good used equipment instead - but the installers might have had a procedure to send them straight to somewhere where he wouldn't have controlled access to them.
Re:RMA System (Score:4, Interesting)
I suspect the RMA agreements are different for very large customers. At least with Dell if you are a preferred buyer you can issues your own RMA (and I suspect the really large customers have even better deals of on-site spares and more). It's not uncommon for vendors to trust their best customers and to make it easy to get repair parts. Even ordinary retailers are able to get credit for customer returned items without physically shipping the defective part back to the vendor. In many cases the vendor just trashes the return part so there is a cost associated with handling an RMA. The total value of the defective parts in this case was probably a small percentage of Verizon's purchases. And if you're Cisco you don't want to piss off a good customer by accusing them of cheating on RMAs.
But eventually you'll get caught.
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Cisco probably goes along with lenient RMA terms for major clients because they have such profit in the contract that it's not really costing them any money to provide that leniency, plus getting a large volume of broken equipment back has its own costs. The marginal value of the equipment may not be high enough to warrant repairing it, at least for low end equipment.
It also wouldn't surprise me that Cisco would have some kind of competitive intelligence team that buys equipment from resellers and traces i
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I think the issue with selling the old item is getting the clearance to replace a "good part" where it has not triggered an alarm for being bad. I am sure they would have to jump through a lot of hoops to replace parts on a working network if there is not alarm even if there is redundancy in place to not notice you taking something down to replace it. Again you still end up where those S/N get traced back to Verizon when someone calls support on them. My guess is it was easier not to have to fight the red t
Re:RMA System (Score:4, Interesting)
Almost everyone offers a super precious metal support contract where you keep the bad parts
Re:RMA System (Score:5, Interesting)
Well, when you work for a large company, and know how disorganized they are, I can see how a person would get to thinking "they will never know" and 99.9% of the time... be right.
I distinctly remember a few incidents...very very minor stuff I am thiniing of. One machine, can't find it in the asset DB. So I look up an old work order, there it is... with asset tag info. I look up the tag, different machine. What gives?
So we track it down (because we needed to submit work order for the original machine).... turns out, somebody never updated the asset DB, so whoever submitted this old work order must have just put the name in, and selected a different asset tag, just because he had no way to look up the real one (we only found it because we asked the right person who had it on a spreadsheet). No fraud, just "this place is so big, and tracks things so poorly, that I can enter anything" even more "I have to to get my job done".
Translate that to an order system, you probably have several systems, all ordering through some central department. Between all the engineers and departments, they probably get some number of these non-return fees as a matter of course. He probably found that out, and realized that they didn't have the right info to really track them down easily. My guess would be he got a bit greedy and they noticed the numbers steadily climbing and wanted to know why.
Then, well, it takes time to build a case. I bet they let him do it a couple of times before they finally fired him.
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$4.5M of Cisco Gear? (Score:5, Funny)
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Simple theft != technologically interesting. (Score:2)
Which Verizon proccess did he used ? (Score:1)
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Comment removed (Score:4, Insightful)
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Not strictly false; but not terribly usefully true.
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He trades HIS time for money. The value of his time is dictated to him by his employer, because he has no bargaining power, and his employers fight dirty to prevent any collective bargaining power accumulating in the form of a union, but at least it's his time, an honest trade of a real commodity.
Traders trade other peoples money. They dictate the value of stocks, and currencies. The very definition of the stock market is an instrument that defines the value of companies, and the traders play it for all the
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Traders trade other peoples money.
They only trade their own money OR the money of other people who have given it to them voluntarily to trade. This is no different than you giving your daughter money to help buy a house.
They dictate the value of stocks, and currencies.
Absolutely false. The market as a whole determines the value of stocks and currencies, via standard accepted accounting practices. A used car dealer doesn't dictate the value of his cars, the market determines that.
The very definition of the stock market is an instrument that defines the value of companies, and the traders play it for all they can get.
No. The definition of the stock market, is the environment in which stocks are traded. It doesn
Capitalism works (Score:1)
You seem to hate market traders for some reason. Could it be that you lack the basic knowledge and intelligence needed to invest wisely?
Go back to watching "Dancing with the Stars" on that nice TV you bought in that installment plan. That's as close you should get to the financial system, it takes more brains than you have to play this game...
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Re:Capitalism works (Score:5, Funny)
Also, trading floors are frictionless ideally planar surfaces, inhabited by perfectly spherical traders who obey the ideal gas laws...
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Go back to watching "Dancing with the Stars" on that nice TV you bought in that installment plan.
Installment plan? Ugh, you mean like one of those Rent to Own places?
The ones who charge like $600 for a Nintendo Wii (retail price $150)?
Re:Verizon (Score:5, Insightful)
Wrong
There have been numerous studies done which show there is little relationship between wage paid and work done. Wages only influences the retention of your trained workforce (less wages, more training budget) when they switch to a more profitable job (in a bad economy, wage goes down and productivity up).
Put it another way. Take your average production line employee and double his pay. Does production increase any? No. Production is limited by outside factors (order received, assembly time, work flow from other members, waiting for results to be generated...) However that person may feel better, but as a company I really don't care how that employee feels (yes I know this isn't PC but it is real). Why should I then increase a person's wage?
Take another example. A company in the U.S. competes against a company outside of the U.S. Suppose that there is a extreme difference in labor costs between these two countries/companies. As a result the price for the finished product is much lower when produced in the company outside of the U.S. Which one will the consumer buy? (Hint, take a look at where your car/computer/clothing etc was assembled/built). High (or increasing) wages are counter-productive.
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