Sales rep at Cisco reseller pleads guilty to fraud

Cisco defrauded of over US$400,000 in networking equipment

A salesman at a Cisco reseller in Minnesota pled guilty this week to defrauding the vendor of more than US$400,000 in networking equipment.

Charles Levi Lytle admitted to mail fraud, wire fraud, conspiracy to commit mail fraud and wire fraud, and conspiracy to commit money laundering, according to the Help Net Security Web site. Lytle is a sales representative for Interlink Communications, a reseller of new and used Cisco products, according to the HNS posting.

Lytle's plea agreement states that he schemed to defraud Cisco under the SMARTnet service contract program, wherein Cisco agreed to provide customers with technical support, including advance hardware replacement, according to the HNS posting. Advance hardware replacement allowed customers to obtain replacement equipment from Cisco without having first to return the faulty gear.

The plea agreement states that from January 2001 to August 2002, Lytle and others at Interlink conspired to submit fraudulent SMARTnet service contract claims to Cisco to receive replacement parts to which they were not entitled, according to HNS. The defendants and others then sold these parts to customers and deposited the payments in Interlink's bank account.

Lytle and others disguised their fraudulent acquisition and sale by altering their internal purchase, sale and inventory accounting system to make it appear as if the parts had been legitimately acquired, the HNS site states.

This is not the first instance of SMARTnet fraud. Early last year, a Massachusetts man was arrested on charges of scamming Cisco out of millions of dollars through false hardware warranty claims.

Lytle remains out of custody pending sentencing, which is scheduled for April 9, according to the site. The maximum statutory penalties for the mail fraud and wire fraud conspiracy and all but one mail fraud and one wire fraud charge are five years in prison and a US$250,000 fine.

Because one mail fraud violation and one wire fraud violation occurred after the effective date of the Sarbanes-Oxley Act, the maximum statutory penalties for those two violations are 20 years in prison and a US$250,000 fine, according to HNS. The maximum penalties for the money laundering conspiracy are 10 years in prison and a US$250,000 fine.

A Cisco spokesman said the company is "very pleased with the continued support we receive from the United States government in helping us combat fraud."

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jim Duffy

Network World
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?