World Tribune | May 15, 2008

An FBI presentation states that China has counterfeited Cisco Systems network routers and may be using the equipment to penetrate U.S. government and private sector computer networks.

Federal authorities in February seized some 400 counterfeit Cisco Systems knockoffs worth $76 million. The equipment included routers, switches, gigabit interface converters and WAN interface cards.

Among the purchasers of the fake equipment were the U.S. Naval Academy, U.S. Naval Air Warfare Center, U.S. Naval Undersea Warfare Center, U.S. Air Base at Spangdahelm, Germany, the Bonneville Power Administration, General Services Administration, and the defense contractor Raytheon, which makes key missile and weapons systems.

The FBI briefing slides on the case stated that while there are “intelligence gaps” on why the Chinese made the counterfeit equipment it could have been for profit or as part of a state-sponsored operation.

Additionally the scope of the Chinese counterfeit equipment may extend beyond routers to include fake IT equipment such as PCs and printers.

Under a section titled “The Threat,” the FBI described the effort as “IT subversion/supply chain attack” that could “cause immediate or premature system failure during usage.”

The counterfeit equipment also could be used to “gain access to otherwise secure systems” and to “weaken cryptographic systems.”

The briefing slide said the Chinese information warfare efforts require “intimate access to target systems.”