Cops, 3Com Roust Router Rip-off

Cops, crooks and cases of loot. It's about as exciting as things get in the channel. File this one under: When small VARs go bad.

Broward County, Fla., law enforcement officials this week arrested two South Florida residents who were allegedly posing as a small technology reseller to poach free gear from networking manufacturers, including 3Com and Nortel.

3Com's security officials, along with agents of the Broward Sheriff's Office (BSO) Economic Crime Unit, staged a sting operation to shut down the international scam that police say ripped off more than $2 million in computer equipment, mostly routers and switches.

Officials charged Kevin Dunn, 28, of Lauderhill, Fla., with organized scheme to defraud, dealing in stolen property and grand theft. Also charged was Dunn's companion, Tamar Richards, 27, of Tamarac, Fla., with aiding an organized scheme to defraud.

According to detectives, Dunn worked the scam by continually calling vendors' tech support for help with inoperative networking gear. The vendors would routinely ship out new units to Dunn along with return labels for the failed gear, which, of course, Dunn never had.Dunn, who claimed he worked for a small business called "InverraryCRPC1," hit up 3Com for routers worth $670,000. He reportedly kept the equipment in a North Lauderdale storage unit, a spokesman for the BSO said.

In a clever bit of "rebranding," the sheriff's department says Dunn was taking the 3Com labels off the equipment with a hair dryer. He'd then attach his own label and post the gear on eBay for sale.

Dunn used nearly a dozen phony addresses around South Florida, most of them vacant houses or offices where he could intercept shipments. Dunn had several accomplices in North America, including buyers in Chicago and New York, as well as in Europe, who were pulling the same scam, then shipping the stolen goods to Broward, said BSO spokesman Elliot Cohen.

Dunn picked a bad location for his base of operations. Broward County has a reputation for being one of the most tech-savvy municipalities in the nation. In fact, the BSO owns the domain name www.sheriff.org.

"What we're able to do and who we can go after, naturally, depends on how sophisticated our department is," Cohen says. "We have resources dedicated to economic crimes and within that unit a focus on technology."Cohen says the BSO has law-enforcement agents dedicated to a number of cutting-edge efforts, including cracking down on identity theft.

3Com officials declined to comment other than to confirm they had cooperated with the BSO's investigation. According to court documents, 3Com notified police after it noticed an unusual order pattern in South Florida. Detectives made their first buy from Dunn on eBay in April, purchasing a $2,500 router for just $1,500.

Earlier this week, detectives made a $5,000 purchase from the same eBay account, then tracked the payment to a Pompano Beach, Fla., Federal Express office. That's where Dunn and Richards were arrested when they tried to ship the stolen gear, Cohen says.

Several state and federal agencies continue to investigate and more arrests are possible in the case, he adds.