Crime Doesn't Pay for N.Y. VAR Caught Selling Fake Cisco Gear

An Ossining, N.Y., reseller who for four years sold cheap Chinese wireless networking gear disguised as high-end equipment from Cisco Systems is headed for a two-and-a-half year stretch in federal prison.

U.S. District Court Judge Stephen C. Robinson on July 31 handed down the sentence for Charles Lacy-Thompson, 52, of Briarcliff Manor, N.Y., owner of Coletronic Computer. Prosecutors had been seeking up to five years in jail for Lacy-Thompson, who was also ordered to pay $2.2 million directly to Cisco for the infraction.

"This was a crime of pure greed," the judge said during sentencing. "This was an individual who could have done things the right way. The only consequence of that is that he would have been less rich."

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According to court records, from 2003 to 2007, Lacy-Thompson imported generic wireless access points and other related networking products from China along with counterfeit Cisco labels and product packaging. Selling the fake Cisco gear netted Lacy-Thompson and Coletronic $4 million in sales in 2005 and nearly $5 million in 2006, court records show.

Lacy-Thompson's lawyer, Phil Foglia, pleaded for a reduced sentence, saying his client had admitted his role in the crime, paid a U.S. Customs fine and made good on nearly $1.2 million in back state and federal taxes.

A man who answered the phone at Coletronic's Ossining headquarters said no one was avaliable to comment on the matter and that he did not know if Coletronic was still a going concern.

The prosecution was handled by the Major Crimes Unit of the United States Attorney’s Office in New York's Southern District, the same office that, in November 2006, began the prosecution of Terrence D. and Damon T. Chalk, of phony managed service provider Compulinx in White Plains. The pair are charged with submitting some $1 million worth of credit applications using the names and personal information—names, addresses and social security numbers—of some of Compulinx's 50 employees. According to federal prosecutors, the employees' information was used without their knowledge; the Chalks falsely represented to the lending institutions, in writing and in face-to-face meetings, that the employees were actually officers of the company.

Terrence Chalk is also charged with racking up more than $100,000 in unauthorized credit card charges. If convicted, he faces 165 years in prison and $5.5 million in fines, prosecutors say. Damon faces a maximum sentence of 35 years imprisonment and $1.25 million in fines. According to Herbert Hadad, a spokesman for the Southern District's White Plains office, the Compulinx case is proceeding and the pair is due back in court on Aug. 5.