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May 6, 2010

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(HOUSTON) - Ehab Ali Ashoor, 49, a Saudi citizen residing in Sugar Land, Texas, has been sentenced to 51 months in prison for purchasing counterfeit Cisco Gigabit Interface Converters (GBICs) from an online vendor in China in an attempt to satisfy a contract he had with the United States Marine Corps in Iraq to deliver genuine Cisco GBICs, United States Attorney José Angel Moreno announced today along with Michael Feinberg, Immigration and Customs Enforcement (ICE) acting special agent in charge.

Ashoor has been in custody since being convicted in January 2010 after a three-day trial before United States District Judge David Hittner. The trial was the first in the nation involving counterfeit Cisco network hardware products. In addition to the sentence of imprisonment, which was the maximum of the applicable sentencing guideline range, Judge Hittner ordered Ashoor to pay restitution in the amount of $119,400 to Cisco Systems Inc. Ashoor is also subject to deportation from the United States upon completion of his prison sentence.

“Ashoor’s attempt to fulfill his contractual obligations to the U.S. Marine Corps through the use of counterfeit Cisco computer parts could have placed our men and women in uniform at risk had he been able to successfully deliver those counterfeit goods. Thanks to the efforts of Customs and Border Protection (CBP) officers in Illinois, Ashoor did not succeed, “ said Moreno. “My office and our law enforcement partners within the Department of Justice and the Department of Homeland Security will continue to aggressively investigate and prosecute those attempting to perpetrate a fraud upon our troops.”

According to the evidence introduced at trial, Ashoor, through his company CDS Federal Inc., was awarded a contract to supply 200 Cisco GBICs to the Marine Corps for use in their computer network at the Marine Base in Al Taqaddum, Iraq, located approximately 65 kilometers west of Fallujah. The language of the contract signed by Ashoor specifically stated that the GBICs had to be genuine Cisco products and not an imitation brand that claimed the same specifications. It further cautioned that, “Not only is this a quality issue it is a possible security issue.” Testimony at trial showed that the computer network for which the GBICs were intended is used by the Marine Corps to transmit troop movements, relay intelligence and maintain the security of the base at Al Taqaddum. 

Despite the language of the contract and despite receiving a warning from an online vendor that GBICs being sold by Chinese online vendors were counterfeit, Ashoor nevertheless purchased 200 GBICs from a Hong Kong vendor off eBay for approximately $25 each. Further, e-mails recovered by ICE agents showed that Ashoor had to specify to the Hong Kong seller that he wanted the GBICs to be in Cisco packaging. The evidence at trial showed that the price Ashoor paid for the GBICs was less than 5% of the market price for genuine Cisco GBICs. Based upon the terms of the contract, Ashoor was to be paid $595 per GBIC for a total contract price of $119,000. In attempting to satisfy the contract with counterfeit products, Ashoor paid only $5,500 for the 200 counterfeit Cisco GBICs from China, which would have netted Ashoor a profit of more than $113,000, or 2,000%, had CBP inspectors in Chicago, Ill., not intercepted the counterfeit parts before Ashoor could successfully deliver them to the Marine Corps in Iraq. 

The investigation leading to the charges was conducted by ICE with the assistance of the Department of Defense - Criminal Investigative Service and CBP. This investigative effort is part of Operation Network Raider, a joint domestic and international enforcement initiative between the Department of Justice and the Department of Homeland Security targeting the illegal distribution of counterfeit network hardware manufactured in China. The case was prosecuted by Assistant United States Attorneys Jason Varnado and Gregg Costa.


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