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Verizon Tech Given 4-year Federal Prison Sentence For $4.5M Equipment Scam

timothy posted about 2 years ago | from the job-opportunities dept.

Crime 163

McGruber writes "Michael Baxter, the network engineer at the southeastern regional headquarters of Verizon Wireless who submitted hundreds of fraudulent service requests to Cisco, has been sentenced to four years in federal prison, followed by three years of supervised release. Baxter was also ordered to pay $2.3 million in restitution to Cisco Systems, and $462,828 in restitution to Verizon. Instead of placing the replacement parts into service in the Verizon Wireless network, Baxter took the parts home and sold them to third-party re-sellers for his own profit. He used the money to buy cars, jewelry and multiple cosmetic surgeries for his girlfriend."

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What kind of prison? First? (1, Funny)

Cutting_Crew (708624) | about 2 years ago | (#41552141)

a white collar or pound me in the a$$ prison?

Re:What kind of prison? First? (0, Troll)

couchslug (175151) | about 2 years ago | (#41552247)

It's Federal, so "white collar". Four years is a chickenshit sentence.

If he'd held up a convenience store he could easily have gotten 7 mandatory or more.

Re:What kind of prison? First? (2, Interesting)

Anonymous Coward | about 2 years ago | (#41552377)

You don't know anything about federal prison. Some of them can be brutal.

Re:What kind of prison? First? (3, Insightful)

Anonymous Coward | about 2 years ago | (#41552393)

Threatening someone else's life at gunpoint in 60 seconds is completely different than stealing $2.8 mil over the span of a decade.
But I think you're seeing in terms of theft of $20 vs. $2.8 mil.

I think terrorizing someone else is worth at least several thousand dollars in therapy. For some people it takes years to trust another human being again. Others never recover. But if you're a tough guy, you can carry on like it's no big deal. For Sprint and Cisco, $2.8 mil is a drop in their financial bucket.

Re:What kind of prison? First? (4, Interesting)

Anonymous Coward | about 2 years ago | (#41552699)

I've heard the argument made and I disagree. Yes, threatening someone with a weapon causes some very real emotional distress, but of the people I know have been through a robbery in most cases it was so quick that beyond the initial moment of shock it's not something that affects their day to day lives. These "harmless" white collar crimes that involve millions of dollars have the power not only to affect far more than just one person, but to put them through years of anguish. One robbery might scare a clerk shitless for 10 minutes, one mortgage scammer can affect thousands of people, destroy their health, end their marriages, and put their families on the street without ever seeing the victim face to face. At least most robberies are committed out of desperation rather than a sense of greed and entitlement.

Re:What kind of prison? First? (5, Insightful)

raehl (609729) | about 2 years ago | (#41552769)

but of the people I know have been through a robbery in most cases it was so quick that beyond the initial moment of shock it's not something that affects their day to day lives

You're experiencing selection bias. It's hard to meet people who have been killed in robberies.

If you cause a violent confrontation, there is real risk someone gets seriously hurt or killed. They could certainly be injured in a manner that costs society far more than $2.8 million in medical treatment costs over the life of the victim.

If you steal some equipment, there's a financial loss, but no one is going to get hurt.

Discouraging people from creating violent situations is far more important than discouraging people from stealing from companies with insufficient controls.

I'm far more worried about a guy who might point a gun at my head when I'm trying to pick up some milk than I am a guy who is going to steal some hardware when I'm not looking.

Re:What kind of prison? First? (2, Interesting)

Anonymous Coward | about 2 years ago | (#41553061)

It's easy to see at the extremes.

Imagine a world with twice as much property theft and zero violence. Imagine a world with twice the violence and zero property theft.

Which would you rather live in?

Re:What kind of prison? First? (3, Insightful)

Khashishi (775369) | about 2 years ago | (#41553317)

If you steal money, you can be ordered to pay restitution. (Granted, I doubt Baxter will be able to pay that kind of fine.) If you kill someone, you can't unkill them.

Re:What kind of prison? First? (0)

Anonymous Coward | about 2 years ago | (#41552781)

As usual, an AC has one of the better comment.

Re:What kind of prison? First? (0)

Anonymous Coward | about 2 years ago | (#41552977)

But the AC is stupid. His comparison is nothing like stealing Cisco gear. Stealing a family's mortgage indeed would fall within the realm of "things that can seriously affect psychological health", like a robbery. raehl has the best comment here.

Re:What kind of prison? First? (-1)

wisnoskij (1206448) | about 2 years ago | (#41553127)

"never recover [from an armed robbery]"

You have to be joking, and either way it is not the robbers fault if someone is so sensitive that 60 seconds with a complete stranger who never touches them can lead to permanent psychological damage; They were going to live a horrible life no matter what.

Re:What kind of prison? First? (1)

operagost (62405) | about 2 years ago | (#41553273)

Because no one ever actually gets hurt in a robbery.

Re:What kind of prison? First? (5, Insightful)

fustakrakich (1673220) | about 2 years ago | (#41552423)

If he'd held up a convenience store he could easily have gotten 7 mandatory or more

If he had been the company president and a big political contributor, some poor tech way down the ladder would be facing charges instead. If he was a higher up at Goldman Sachs, he would be given a cabinet position at the white house.

The guy committed fraud, hardly worth locking him up. Just take his property and garnish his income for the rest of his life, or until the money is paid back.

Re:What kind of prison? First? (2)

TFAFalcon (1839122) | about 2 years ago | (#41553245)

Agree fully. Why put people like this in jail? Put them in indentured servitude instead. He could be put to work in a homeless shelter, making minimum wage. That way he can pay for his own upkeep AND be a benefit for society.

Re:What kind of prison? First? (1)

Lehk228 (705449) | about 2 years ago | (#41553409)

they already have that, it's called community service

Re:What kind of prison? First? (4, Insightful)

mcgrew (92797) | about 2 years ago | (#41552555)

Federal != "white collar". Minimum security == "white collar". My friend's brother got a ten year sentence in Federal prison for loaning money to a dope dealer (as did half his HS graduating class; dealer got busted and set up everyone he knew whether or not they'd ever had anything to do with drugs, dope dealer spent 2 year in Club Fed). Mike's brother was out in five years, and his life was completely ruined. He was a diesel mechanic who worked on big rigs, but of course lost his job. His wife met another man while he was in prison and divorced him. So he's now unemployable and single with few prospects of ever having another woman.

"Chickenshit sentence"? I hope I've left you a little less ignorant.

Re:What kind of prison? First? (0)

Anonymous Coward | about 2 years ago | (#41552805)

I'm intrigued. Any more info on this obvious case of law enforcement creating their own criminals to bust?

Re:What kind of prison? First? (1)

wisnoskij (1206448) | about 2 years ago | (#41553095)

Well prison is mostly for violent crimes. So that sentence makes sense to me.

Will She Wait? (1)

sycodon (149926) | about 2 years ago | (#41552775)

Or will she go find another Sugar Daddy?

Company Liable? (5, Informative)

Bigby (659157) | about 2 years ago | (#41552151)

So when an employee does something great using the company's resources, the company gets the money. But when an employee does something illegal on the company resources, the company doesn't suffer?

I understand that guy getting something. But Cisco should be suing Verizon, not the person. Verizon would then sue their former employee.

Re:Company Liable? (0)

Anonymous Coward | about 2 years ago | (#41552173)

This is theft and fraud which makes it a criminal case, not a civil issue.

Re:Company Liable? (2, Insightful)

Anonymous Coward | about 2 years ago | (#41552189)

Cisco isn't suing anyone. This schmuck was prosecuted under Federal Wire Fraud charges. The fines constitute restitution.

Re:Company Liable? (0)

Anonymous Coward | about 2 years ago | (#41552193)

What makes you think that Verizon has not paid Cisco for the losses they incurred?

Also, if Cisco sues Verizon, there is a good change they might lose Verizon as a customer. Would you still recommend it? I have no love for Verizon, but even I can see that in this case they do not deserve much blame.

Re:Company Liable? (1)

bigwheel (2238516) | about 2 years ago | (#41552225)

According to the linked Slashdot article, Verizon had no way of knowing, and wasn't seeing any of the money. The guy was using Verizon's resources to scam Cisco.

'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.'"

Re:Company Liable? (1)

stephanruby (542433) | about 2 years ago | (#41552355)

So when an employee does something great using the company's resources, the company gets the money.

His employer didn't really get the money in this case. If the employee had sold the equipment and then given all the profits to his employer, so that his employer could give him a raise or a promotion, then yes, you probably would have a point.

Or if the employer prevents you from investigating the case properly by blocking you every step of the way, then yes, then you sue the employer, you sue everybody who doesn't cooperate, this will then force people to turn on each other.

Personally in this case, I'd sue the girlfriend to try to recover from her, since she's the one who received most of the profits and the gifts from the stolen property (even if she didn't know it was stolen), but then I don't know how civil law would work in that case (assuming it can't be proven that she was an accomplice, if it can be proven that she was an accomplice, then this point would be moot anyway).

Re:Company Liable? (5, Funny)

jmerlin (1010641) | about 2 years ago | (#41552537)

Listen man, it could've been much worse. He could've pirated some music or a movie, too. He'd have 20 years in prison and owe $50,000,000.

Sounds to me like he got off pretty easy.

Re:Company Liable? (2, Funny)

MrEricSir (398214) | about 2 years ago | (#41553097)

Could have gone better too -- if he'd only set his sights a little higher he could have gotten a job on Wall Street.

Re:Company Liable? (0)

Anonymous Coward | about 2 years ago | (#41552673)

So when an employee does something great using the company's resources, the company gets the money. But when an employee does something illegal on the company resources, the company doesn't suffer?

That's an interesting point. I'm reminded of the inventor of the blue LED who won $8.1 Million [slashdot.org] from his former employer as Japanese law requires companies to reward such exceptional performance. Obviously we can't take the opposite approach, where "just following orders" becomes a defense, but our law does seem to favor corporations both ways in this regard. Maybe Japan is onto something...

Crime pays (3, Informative)

Smartcowboy (679871) | about 2 years ago | (#41552157)

He is a living proof that crime pays.

He got millions of dollars and a great lifestyle for years and now he basicaly got free home and free meals for a number of years.

Re:Crime pays (2)

tgeek (941867) | about 2 years ago | (#41552209)

. . . and probably will get conjugal visits from his cosmetically enhanced girlriend!

Re:Crime pays (2)

Score Whore (32328) | about 2 years ago | (#41552303)

Not in federal prison.

Re:Crime pays (1)

rickb928 (945187) | about 2 years ago | (#41552351)

She's probably going to get better offers.

Re:Crime pays (2)

Pieroxy (222434) | about 2 years ago | (#41552821)

She's probably going to get better offers.

She's got all the assets she needs !

Re:Crime pays (2)

I Read Good (2348294) | about 2 years ago | (#41552917)

Not if those "assets" have been repossessed! **shudders**

Re:Crime pays (2)

RenderSeven (938535) | about 2 years ago | (#41552609)

My favorite media tag line, from a Forbes reporter: "Among my favorite expenses were the multiple cosmetic surgeries for his girlfriend – which, if you think about, is sort of keeping with the whole concept of swapping out parts for different parts."

It just shows how stupid this guy is. (5, Insightful)

raehl (609729) | about 2 years ago | (#41552795)

If you have an extra $10,000, buy your girlfriend new boobs.

If you have an extra $1,000,000, get a hotter girlfriend.

Re:It just shows how stupid this guy is. (1)

RenderSeven (938535) | about 2 years ago | (#41553123)

Ha ha ha just like this guy did [youtube.com]

Re:Crime pays (4, Insightful)

spire3661 (1038968) | about 2 years ago | (#41552213)

Id rather be poor and free. 4 years of life is a very long time to me.

Re:Crime pays (1)

Penguinisto (415985) | about 2 years ago | (#41552233)

I suspect that with "good behavior" and prison overcrowding, he could be out on parole in as little as 18 months ...now how he intends to feed himself and make a living after that is another question entirely.

Re:Crime pays (2)

Ironhandx (1762146) | about 2 years ago | (#41552285)

He scammed 45 million dollars. He's going to retire to the Cayman Islands somewhere with the 5-6 million they couldn't account for.

Re:Crime pays (2)

Ironhandx (1762146) | about 2 years ago | (#41552361)

Sigh, reading fail.

He scammed 4.5 million, so he'll retire to the Cayman Islands with the 1-2 million they couldn't account for or take back from him.

As long as he wasn't a total moron at least.

Re:Crime pays (3, Informative)

z_gringo (452163) | about 2 years ago | (#41552343)

The Federal system doesn't have parole. And federal prisoners must complete at least 85% of their sentence, so good behavior will get him a 15% reduction at most.

Re:Crime pays (3, Informative)

timeOday (582209) | about 2 years ago | (#41552457)

Exactly - the problem with prison time isn't just the prison time, it's wearing the scarlet letter of "FELON" for the rest of your life.

Is this [thebeehive.org] the life to which you aspire?

I am a 69 y/o exfconvicted felon. I'd been strugling to make end meet because I can't get a job because my record and my age, there r a lot of descrimination in florida for both. I'm retired and make $672.00 a month. and I can't survive on that kind of money.

I was working in a little restaurant but it shut down last month, I'm desperate to pay my rent, my bills, gas etc. How can I find a job for my age.?

(shudder)

Sorry, but that's stupid (1)

tlambert (566799) | about 2 years ago | (#41552641)

Exactly - the problem with prison time isn't just the prison time, it's wearing the scarlet letter of "FELON" for the rest of your life.

Is this [thebeehive.org] the life to which you aspire?

As opposed to half of recent college grads being unable to find full time work, according to a Rutgers University study? http://www.heldrichpodcasts.com/Chasing_American_Dream_Report.pdf [heldrichpodcasts.com]

The problem isn't "The Scarlet FELON", it's that the jobs just aren't there for anyone, unless they have in-demand skill sets. Convicted felons and half of all recent college graduates typically don't have them.

On the flip side, half of recent college graduates do have full time jobs, and convicted felons can get jobs; in both cases, they have to have in-demand skill sets.

Re:Sorry, but that's stupid (1)

jandrese (485) | about 2 years ago | (#41553063)

FYI, that study doesn't say half of college grads are out of work, many of them have jobs but are underemployed. People with philosophy degrees flipping burgers for example.

Re:Sorry, but that's stupid (3, Insightful)

yurtinus (1590157) | about 2 years ago | (#41553181)

People with philosophy degrees flipping burgers for example.

I don't understand how this qualifies as underemployed...

Re:Crime pays (0)

Anonymous Coward | about 2 years ago | (#41552847)

With the money he stole he won't need a job. If he can invest (i.e. the money isn't buried in a skull island), he'll have much more when he's out.

Re:Crime pays (2)

jandrese (485) | about 2 years ago | (#41553047)

I'm having trouble feeling too sorry for the guy being labeled a criminal after he scammed 4.5 million dollars worth of equipment over a several year period. He's being labeled a criminal quite justly in this case. Maybe he'll reform in prison and deserve a second chance, but he's earned some extra scrutiny from whomever wants to hire him.

Re:Crime pays (1)

timeOday (582209) | about 2 years ago | (#41553411)

Hey, I didn't say I would ever want to hire somebody convicted of employee theft myself. But unlike the GP I don't envy the crook in this case, he's getting what he deserves and I wouldn't want to be in his shoes now.

Re:Crime pays (3, Insightful)

Belial6 (794905) | about 2 years ago | (#41552405)

And yet you are likely to give up far more than 4 years of your life for far less money.

Re:Crime pays (1)

geekoid (135745) | about 2 years ago | (#41552491)

Insightful.

Re:Crime pays (1)

GameboyRMH (1153867) | about 2 years ago | (#41552813)

I know I did, and $1-2m is a lifetime's worth of pay...if he has access to that money after he gets out, that's a damn good deal, he'll never have to work again, or could have many options for starting his own business if he wants to.

Re:Crime pays (0)

Anonymous Coward | about 2 years ago | (#41552219)

if you think prison and the free home and free meals are so great you know it's pretty easy to get yourself a piece of that action. Feel free to commit a crime and get a free home and free meals.

Re:Crime pays (1)

fustakrakich (1673220) | about 2 years ago | (#41552473)

Some people do exactly that [thedailybeast.com]

Re:Crime pays (2)

cvtan (752695) | about 2 years ago | (#41552809)

Lets see. Invest 4 years of your life to get several million dollars. I think there are a large number of people that would take that deal just to support their families.

Re:Crime pays (2)

amicusNYCL (1538833) | about 2 years ago | (#41553257)

He is a living proof that crime pays.

No, he got caught and lost it all including his freedom. His girlfriend is living proof that crime pays.

He should've stolen billions (2)

fustakrakich (1673220) | about 2 years ago | (#41552185)

Then he simply would've received a harshly worded letter or speech from congress. Eh, like everything else, when it comes to 'justice', it all depends on who you are.

Re:He should've stolen billions (1)

mcgrew (92797) | about 2 years ago | (#41552921)

Then he simply would've received a harshly worded letter or speech from congress

You mean like the strongly worded letter Bernie Madoff, former head of NASDAQ, got?

Re:He should've stolen billions (1)

fustakrakich (1673220) | about 2 years ago | (#41553443)

Yeah, he was a chump also. If he had just played ball, he wouldn't be where he is today. How many other Bernie Madoffs are out there right now doing exactly the same thing, working for the big banks, all over Wall Street, and in government itself?. And notice that he stayed out of jail for a very long time while perpetrating this fraud until it became a little too obvious. When a guy gets this stupid, they gotta take him down before people realize how much this corruption permeates the entire system.

Bernie Madoff, former head of NASDAQ

non-executive chairman - sounds like a fall guy to me.

Man, that was stupid... (4, Insightful)

Penguinisto (415985) | about 2 years ago | (#41552195)

...incidentally, I don't mean the theft part, which is pretty dumb on its own. What I mean is, he should have been socking that money into Cayman Island accounts (or maybe Venezuelan bank accounts and such), then get out of dodge once he hit the $2m mark or so. Get enough scratch and live in a 3rd-world country that doesn't do extradition, and you can get an entire flock of local women instead of having to throw a ton of money on just one.

Then again, dunno how much money he himself got, as the $4.5m figure could be what Cisco values the parts to be, which given Cisco's pricing could be as little as three fans and a 6509 power supply w/ SmartNet support. :p

I am curious as to WTF these guys think when they start pulling stunts like this, however. I mean, if you're gonna flirt with PMITA Prison time, you'd best be damned smart about it, do at least some research, and get your shit planned in advance...

Re:Man, that was stupid... (1)

Translation Error (1176675) | about 2 years ago | (#41552431)

Get enough scratch and live in a 3rd-world country that doesn't do extradition, and you can get an entire flock of local women instead of having to throw a ton of money on just one.

Even a criminal is capable of being in love with someone.

Re:Man, that was stupid... (1)

WGFCrafty (1062506) | about 2 years ago | (#41552525)

Get enough scratch and live in a 3rd-world country that doesn't do extradition, and you can get an entire flock of local women instead of having to throw a ton of money on just one.

Even a criminal is capable of being in love with someone.

Or hedonistically in love with her body.

Re:Man, that was stupid... (1)

sconeu (64226) | about 2 years ago | (#41552611)

He wasn't in love with her body until she had all the plastic surgery done...

Re:Man, that was stupid... (0)

Anonymous Coward | about 2 years ago | (#41552489)

and you can get an entire flock of local women instead of having to throw a ton of money on just one.

And every one of them ready to cut his throat for a few extra pesos, assuming he doesn't just get robbed.

Re:Man, that was stupid... (1)

OzPeter (195038) | about 2 years ago | (#41552559)

Get enough scratch and live in a 3rd-world country that doesn't do extradition

Hmm I think Gottfrid Svartholm [slashdot.org] tried that approach and you can see where it got him.

Play stupid games... (0)

Anonymous Coward | about 2 years ago | (#41552613)

...win stupid prizes.

Yep, he did just that.

Re:Man, that was stupid... (1)

jandrese (485) | about 2 years ago | (#41553125)

I wouldn't be so quick to go for the "dump money in some overseas numbered account and head off to some country with no extradition laws" approach. Have you seen the list of countries that don't extradite?

Bhutan Botswana Brunei Burkina Faso Burundi Cambodia Cape Verde Central African Republic Chad China Comoros Djibouti Equatorial Guinea Ethiopia Gabon Guinea Guinea Bissau Indonesia Iran Ivory Coast Jordan Kuwait Laos Lebanon Libya Madagascar Mali Maldives Mauritania Mongolia Morocco Mozambique Nepal Niger Oman Qatar Russia Rwanda Samoa Sao Tome e Principe Saudi Arabia Senegal Somalia Sudan Syria Togo Tunisia Uganda United Arab Emirates Vanuatu Vietnam Yemen Yemen South Zaire

It's daily machete fight or tiny tourist trap island for the most part. Your $2 million wont last long in some of the other options like the UAE or Saudi Arabia.

Re:Man, that was stupid... (1)

amicusNYCL (1538833) | about 2 years ago | (#41553285)

I doubt he planned this advance. He probably ordered a part that they ended up not needing, Verizon got billed for it, he ended up with it and sold it. Then he just sort of kept doing that.

Re:Man, that was stupid... (1)

Khashishi (775369) | about 2 years ago | (#41553361)

It sounds stupid because you don't hear about the guy who got away with it.

We had something similar (2)

smooth wombat (796938) | about 2 years ago | (#41552199)

We had a Department of Corrections employee (for the state) who bought $123,000 worth of IT equipment then sold it on eBay for $54,000.

Obviously he was caught when the audit was done. So far, no comment from his attorney.

HALIBURTON STEALS $4.5 BILL FOR LAST 10 YEARS !! (-1)

Anonymous Coward | about 2 years ago | (#41552201)

and is rewarded more contracts off of which it can steal MORE !! Take out the big motherfucks, then if you have time, get the rest.

Girlfriend Changelog (4, Funny)

SomeoneGotMyNick (200685) | about 2 years ago | (#41552231)

cosmetic surgeries for his girlfriend

Just HOW MUCH does it cost to modify a blow-up doll?

Re:Girlfriend Changelog (0)

Anonymous Coward | about 2 years ago | (#41552317)

You can get gloves fairly cheaply... Half-price if you only need it for one hand.

Re:Girlfriend Changelog (3, Funny)

Anonymous Coward | about 2 years ago | (#41552739)

Apparently it's somewhat pricey [realdoll.com] . Although $2.3 million is easily enough to order the most depressing harem in history!

Enhanced girlfriend (2, Funny)

Anonymous Coward | about 2 years ago | (#41552245)

I think the Cisco folks are entitled to some action, since they can get their money back on this specific situation.

wait, what? (0)

Tastecicles (1153671) | about 2 years ago | (#41552273)

He gets 4 years in a Fed pen for contributing to the economy??

Something wrong here.

"multiple cosmetic surgeries for his girlfriend" (1)

hduff (570443) | about 2 years ago | (#41552287)

Boob job, nose job, vaginoplasty?

Probably all three. She should have to "return" them as well if she knew about the fraud or spend time in jail.

Re:"multiple cosmetic surgeries for his girlfriend (1)

Kiaser Zohsay (20134) | about 2 years ago | (#41552399)

Pics or it didn't happen!

Re:"multiple cosmetic surgeries for his girlfriend (1)

mr1911 (1942298) | about 2 years ago | (#41552893)

multiple cosmetic surgeries for his girlfriend

It would probably have been cheaper to just get a better looking girlfriend.

Girlfriend...? (1, Offtopic)

Nethemas the Great (909900) | about 2 years ago | (#41552341)

What no pictures of the girlfriend?

Re:Girlfriend...? (0)

Anonymous Coward | about 2 years ago | (#41553035)

Here you go. [buzznet.com]

Cosmetically enhanced girlfrield? (1)

viperidaenz (2515578) | about 2 years ago | (#41552365)

Pics or it didn't happen.

Re:Cosmetically enhanced girlfrield? (0)

Anonymous Coward | about 2 years ago | (#41552693)

Came here to say that.

What a stupid (1)

geekoid (135745) | about 2 years ago | (#41552469)

reason to put someone in prison.
There are better ways to punish and develop corrective measures.

Re:What a stupid (1)

GoogleShill (2732413) | about 2 years ago | (#41552995)

Agreed. Prison should only be used to keep violent people away from the rest of world. The only exception being if an offender repeatedly doesn't follow the rules of probation/house arrest/etc.

CUBA (0)

Anonymous Coward | about 2 years ago | (#41552579)

Cisco Unified Breast Augmentation

I worked there/with him in 90s (0)

Anonymous Coward | about 2 years ago | (#41552631)

I didn't know him well but it absolutely doesn't surprise me it could take that company nine years to notice $4.5M worth of missing equipment. I ran what was supposed to be the asset tracking system at one point but there was absolutely zero enforcement on compliance! engineering would say: "our job is to build cell sites! we don't have time to scan bar codes!" & accounting's position was: "well, that's balance sheet & non-cash so it doesn't really matter...". can't vouch for this 100% but there was a story that in '92 we had a retail store have its power turned off b/c A/P didn't know it existed... luckily I got the opportunity to learn oracle & got the hell out of dodge!

Something missing here (1)

Comen (321331) | about 2 years ago | (#41552635)

I have been doing this same procedure with Cisco for years an years, When a card breaks in the feild and you do a RMA on that part (which can happen allot if you have lots of gear) you get the new replacement part in the mail right away, you then have a certain amount of time to return the old bad part.
If Cisco does not receive that part in a certain amount of time they will be contacting your boss or someone until they get that part back.
I have had Cisco say I did not return a part that I did return and finally figure out where it was later, but its a big deal to them, these cards I replace are atleast 40K a card. Since then I started keeping all receipts from UPS to cover myself.
Also who can you sell these cards too anyway? they all have built in serial numbers and small companies would normaly not need them, its mostly only used in equipment used by bigger companies. These type of companies would normaly not buy something they can not open a Cisco trouble ticket on because when they see that serial number a flag is going to go up right way I would think.

Re:Something missing here (2)

very1silent (2194890) | about 2 years ago | (#41552841)

I've seen major ISPs put networking gear acquired on the used market into service. During the years after the dot-com bust, it was pretty common.

Re:Something missing here (1)

jandrese (485) | about 2 years ago | (#41553147)

I suspect there is a healthy grey market for Cisco parts from people who don't want to pay for a service contract. If the equipment is not mission critical and maybe a few years old this would seem to be a reasonable option. You don't get software updates, but if the device is doing its job it really doesn't need them. This is especially true if you're buying used hardware at a fraction of the price.

He did pretty well, actually (1)

Weaselmancer (533834) | about 2 years ago | (#41552677)

A $4.5 million dollar scam. Restitution of $2.3 million to Cisco, $462,828 to Verizon. So that makes his net profit approximately $1.75 million. He'll be in prison for 4 years. Probably out in 2 with good behavior but let's say he does the full 4. That's $1.75 million / 4 = $435,000 a year. Not bad.

I'd hardly call that a deterrent to crime. Hell, he's currently more profitable than the company I work for.

Re:He did pretty well, actually (1)

nedlohs (1335013) | about 2 years ago | (#41552881)

Except it would be unlikely he got full price reselling things. And his future earnings are going to be significantly impacted as well.

This is not the first hit on Verizon... (5, Interesting)

JRHelgeson (576325) | about 2 years ago | (#41552705)

Verizon has been targeted many times. They would steal network equipment, then call Cisco to get an advance replacement RMA, which would take their stolen equipment and double it. Then they would sell the gear on the 'Grey Market' for Cisco hardware. They focused primarily on Cisco 12000 line cards, where an individual card sells for $100k+ and are installed in a redundant fashion.

Then they started just getting serial numbers for equipment and starting RMA's for that, and selling it on the Grey market. When Cisco called to get the status on the return... Verizon would reply with "what return".

I helped track one of these cats back in early 2000's - once he found we were hot on his trail, he abandoned his Bentley, and his Mansion and fled back home to Russia - where he lives currently. Interestingly, this same type of scam popped up in eastern Europe shortly after his relocation.

Our suspect had a friend who worked in security at one of the Verizon data centers. He would grant 'back-door' access to a facility, and permit the theft of the hardware. Stories abound of this guy being too poor to buy gas one day, borrowing $50 from friends in order to make to to the airport to fly out to New York then from New York to California, then California back home - pulling a massive roll of C notes from his pocket and repaying the $50 loan + a couple of C-notes to show his gratitude.

Perhaps the reason we hear about this happening with Verizon was that they became aware of the scam early, then kept tracking the perps until they were finally able to catch them. Kudos to Verizon Security for being able to close the loop on this one. These cases are extremely hard to track and crack.

http://www.nytimes.com/2004/11/27/nyregion/27theft.html?_r=2&ex=1152936000&en=28ee4e10417b8e50&ei=5070&oref=login [nytimes.com]

http://www.zdnet.com/level-3-falls-victim-to-data-centre-robbery-3039284520/ [zdnet.com]

Re:This is not the first hit on Verizon... (1)

OzPeter (195038) | about 2 years ago | (#41552919)

Verizon has been targeted many times. They would steal network equipment, then call Cisco to get an advance replacement RMA, which would take their stolen equipment and double it. Then they would sell the gear on the 'Grey Market' for Cisco hardware.

How the hell does Cisco not noticed that RMA'ed equipment never seems to show up? At $100k+ a card someone at Cisco should have gotten reemed for not doing their job.

His only mistake... (2)

JustAnotherIdiot (1980292) | about 2 years ago | (#41552853)

...was doing this outside a CEO position.

$4.5M or $2.8M (1)

C_Kode (102755) | about 2 years ago | (#41552989)

The Slashdot title says $4.5M, but the article it links to says $2.8M

Re:$4.5M or $2.8M (1)

Revotron (1115029) | about 2 years ago | (#41553003)

The main difference there is most likely "Cisco value" and "Street value".

Wow. Just more uninformed people on /. (2)

Lashat (1041424) | about 2 years ago | (#41553029)

The prison time is only PART of the sentence! " Baxter was sentenced to 4 years in prison to be followed by 3 years of supervised release, and ordered to pay $2.33 million in restitution to Cisco Systems, and $462,828 in restitution to Verizon."

Nearly $2.8 million to pay back off of the $2.8 million they say he stole. I am guessing that he doesn't have ALL of the proceeds from his caper.

IF he gets minimum security Federal Prision Camp, he will likely go closest to home. FCP Montgomery. http://www.bop.gov/locations/institutions/mon/MON_aohandbook.pdf [bop.gov]

Don't sound like 4 years of fun to me. In any institution or camp there is going to be a heirarchy. This guy is none of the things that are going to make his life in "camp" fun. He is not rich! He may be a tough bird, but he is an old bird at 62. All those ailments that get treated outside of "camp" are going to go untreated. No more private doctors. Dentists that only pull teeth. Hey, maybe he can get one of the best jobs there and make $1.46/hour.

Neither Cisco or Verizon lost their lives or were even traumatized by his actions. However, they need a sentence that works as a deterrent, which this is.
Punishment fits the crime.

Re:Wow. Just more uninformed people on /. (1)

Lashat (1041424) | about 2 years ago | (#41553065)

I have seen different $ amounts reported of his haul. $4.5 and $2.8 I don't know which is more accurate. Suffice it to say that they got all his property and accounts. Maybe that Cayman Islands or Isle of Man account survived, but I doubt it.

I did it all for the nookie, for the nookie (0)

Anonymous Coward | about 2 years ago | (#41553055)

So you can take that cookie, and stick it in yo yehhh

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