Owner Of Cisco Reseller Network Genesis Charged With Fraud

Cuong Cao "Calvin" Dang, owner of solution provider and Cisco partner Network Genesis, faces charges on multiple counts of fraud for allegedly selling "counterfeit or stolen Cisco merchandise" between January 2006 and January 2013, according to an indictment Cisco filed with the U.S. District Court of Northern California last week.

Dang had allegedly been buying counterfeit gear from Cisco employees, and then reselling that gear to Network Genesis customers after tweaking the serial numbers to make the products "more difficult to trace," Cisco said in the filing. Cisco described counterfeit equipment as equipment that is "sold as genuine when it was not manufactured by Cisco or does not contain genuine Cisco parts."

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A report from the San Jose Mercury News said Network Genesis saw $37 million in sales revenue during the six years the fraud allegedly took place.

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In a statement provided to CRN, Cisco said the employees involved in the case are no longer employed by the company.

"We are grateful for the efforts of law enforcement, and we have been working closely with them throughout this investigation," a Cisco spokesperson wrote in an email. "The Cisco employees referenced in the indictment have not been employed by Cisco for quite some time. Moving forward, Cisco will continue to cooperate with law enforcement as necessary."

Network Genesis did not immediately respond to a CRN's emailed request for comment. At press time, Network Genesis' website said it was "under development" and did not list a phone number.

According to Cisco's filing, Dang had been selling a range of counterfeit Cisco gear, including Catalyst 6500 series switches and 7600 series routers, which he sold between $8,500 and $12,000 a piece.

Dang allegedly used the money he made selling the gear to buy at least 11 pieces of property in San Jose and five vehicles, including a $105,000 Mercedes Benz.

If convicted, Dang will have to forfeit all property "constituting and derived from proceeds traceable" to sales of any illegitimate Cisco gear. Cisco said Dang also had multiple bank accounts, including two with Wells Fargo, three with JP Morgan Chase and three with TIAA-CREF, allegedly tied to these sales, in addition to the properties and vehicles.

Cisco noted in the filing that this isn't the first time it's had to deal with fraud. "Like many successful companies in the Silicon Valley, Cisco has been the victim of a variety of criminal schemes, including counterfeiting and theft," the networking giant said.

In March, Quin Rudin, the head of CGC Digital, faced charges of wire fraud and identity theft after allegedly bilking Cisco out of $2 million, as well as equipment, by having Cisco believe he had a contract to lease, install and service the gear.

Joe Kovar contributed to this story.