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Making Headway on Cyber Counterfeits

By Kevin Coleman -- Defense Tech Cyber Warfare Correspondent

Back in April 2008 DefenseTech ran a post about the risk of compromised / counterfeit products entering the supply chain supporting sensitive systems. ( ) These risks are still present today some three years later.  However, just recently, Senator Sheldon Whitehouse (D-RI) introduced a piece of bipartisan legislation that addresses this risk. The legislation targets those who traffic in counterfeit goods. The legislation “Combating Military Counterfeits Act of 2011”  is co-sponsored by U.S. Senators John McCain (R-Ariz), Lindsey Graham (R-S.C.), and Chris Coons (D-Del) and if enacted would establish a higher level criminal offense for trafficking in counterfeit military products and would increase penalties for these criminal acts.

Last year, Deputy Defense Secretary William Lynn was quoted in an article on the Pentagon's strategy to counter cyber intrusions, saying that “counterfeit hardware has been detected in systems that the DoD has procured.” So how big is the problem? One published report showed that, in 2010, investigators from Immigration and Customs Enforcement (ICE) made nearly 20,000 seizures of suspected counterfeit materials valued at $1.4 billion; a 34-percent increase from 2009. Last year, the Commerce Department referenced a Defense Department official who estimated that counterfeit aircraft parts were "leading to a 5 to 15 percent annual decrease in weapons systems reliability.”

In 2010 a Saudi national living in Texas was found guilty of trafficking in counterfeit Cisco equipment.  Adding insult to injury he resold the counterfeit equipment for nearly 24 times the price he originally paid for the computer/networking equipment! The Defense Criminal Investigative Service is aggressively working to mitigate this risk and is said to currently have dozens of investigations underway. Now all we have to do is to get our critical infrastructure providers to follow DoD’s lead!

Here's more on the counterfeit problem.

 

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