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Verizon Crime

Verizon Tech Charged In $4.5M Equipment Scam 104

Posted by samzenpus
from the show-me-the-money dept.
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.'"
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Verizon Tech Charged In $4.5M Equipment Scam

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  • greed kills (Score:4, Insightful)

    by Nyder (754090) on Monday December 12, 2011 @06:56AM (#38341430) Journal

    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)

    by erroneus (253617) on Monday December 12, 2011 @07:13AM (#38341480) Homepage

    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.

  • Re:greed kills (Score:5, Insightful)

    by Technician (215283) on Monday December 12, 2011 @07:26AM (#38341522)

    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.

  • Re:RMA System (Score:5, Insightful)

    by gl4ss (559668) on Monday December 12, 2011 @07:44AM (#38341568) Homepage Journal

    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.

  • by fsckmnky (2505008) on Monday December 12, 2011 @09:07AM (#38341782)
    You do realize, *everyone* is a trader, right ? Even the kid slinging burgers at the local fast food joint is a trade. He trades time for money.
  • Re:greed kills (Score:5, Insightful)

    by petermgreen (876956) <plugwash@p10link ... inus threevowels> on Monday December 12, 2011 @09:34AM (#38341948) Homepage

    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:Verizon (Score:5, Insightful)

    by Tolvor (579446) on Monday December 12, 2011 @10:18AM (#38342322)

    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.

  • Re:RMA System (Score:2, Insightful)

    by Anonymous Coward on Monday December 12, 2011 @11:13AM (#38342948)

    "had to HAVE had", shit for brains. "of", jesus....

The first Rotarian was the first man to call John the Baptist "Jack." -- H.L. Mencken

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