Category: Cisco

Cisco Systems Multivan orchestrated the arrest of founder Peter Alfred-Adekeye last year to force a settlement of antitrust lawsuit against Cisco Caravelle, Multivan an executive said on Wednesday.

Multivan, an independent provider of support services and networking equipment, Cisco sued in 2008 claiming the company monopolized the market for its software. Cisco countersued, claiming that Alfred-Adekeye Cisco hacked computers and stole copyrighted software.

In May 2010, Alfred-Adekeye was arrested in Vancouver, Canada, on 97 counts of intentionally accessing a protected computer without authorization for purposes of commercial advantage, according to his arrest warrant. He could be sentenced to 10 years in prison and a fine of $ 250,000 if convicted. The arrest came to light only this week after local media reported Vancouver.

After 28 days, was released on bail, but has not been able to get out of Canada since then, says Deka Yussuf, an executive vice president responsible for marketing Multivan and public relations. Multivan is headquartered in Redwood City, California, but lives in Zurich Alfred-Adekeye said.

The case has stalled for the past 10 months due to the U.S. Attorney’s Office has failed to submit the necessary evidence to extradite Alfred-Adekeye, Yussuf said. Alfred-Adekeye lawyers believe U.S. officials misleading to the Canadian authorities on the need to arrest and extradite him, and who started the hearings that are happening now in Vancouver to investigate this possibility, he said.

After the arrest last May, and Multivan Cisco settled the civil case in July. However, Cisco is behind the entire criminal case, according to Yussuf.

“We believe this is a reprisal of Cisco’s historic antitrust lawsuit against Cisco Multivan,” said Yusuf. “We believe Cisco designed this arrest any criminal proceedings against Multivan Adekeye to force an agreement.”

Before the arrest, the Multivan case had been close to going before a jury, Yussuf said.

Cisco Multivan dismissed charges in a written statement.

“This is an absurd claim Multivan. This case is a matter between the U.S. and Canadian government authorities. We understand that the genesis of the extradition request was an arrest warrant issued by a U.S. judge that was based on a criminal charge returned by a Special Agent of the Secret Service, “said Cisco.

Alfred-Adekeye was unexpectedly stopped while a statement from Cisco lawyers in Wedgewood Hotel Vancouver.

Cisco Multivan suit alleged that forced the team owners to purchase Cisco SMARTnet service contract to obtain software updates and bug fixes. Blocking independent companies as Multivan demand.

“We have assumed that Cisco is hurting consumers and the market and competitors as Multivan … forcing their customers to purchase agreements with SMARTnet (Cisco) to get bug fixes critical software that must be made available any customer who has bought any software, “said Yusuf.

Multivan concerns echoed those expressed by some customers, who have complained that Cisco should fix their mistakes for free as well as other companies like Apple and Microsoft do. Some users have said that the problem is compounded by the second hand and new hardware. Cisco service contracts can not be transferred from one user to another, so buyers of art is normally used to ship the product for inspection by Cisco before they can buy a new contract, which can be costly . In addition, there may not be available SMARTnet contracts for discontinued products.

There is a large market for used Cisco equipment, fueled by buyers who can not afford a new computer and need a router or switch model is now available again, according to Brad Reese, research manager BradReese.Com , which sells refurbished networking equipment and services. It is estimated that the secondary market throughout the world for networking gear in $ 2 billion, with 90 percent of Cisco sales teams.

A one-time Cisco engineer who had sued his former employer, alleging it monopolized the business of servicing and maintaining Cisco equipment, has been charged by U.S. authorities with hacking.

Peter Alfred-Adekeye, who left Cisco in 2005 to form two networking support companies, has been charged with 97 counts of intentionally accessing a protected computer system without authorization for the purposes of commercial advantage, according to an arrest warrant. He faces 10 years in prison and a US$250,000 fine if convicted on the charges.

Alfred-Adekeye was abruptly arrested by the Royal Canadian Mounted Police in Vancouver on May 20, 2010, while giving a deposition to Cisco attorneys in his civil case. A Nigerian citizen and a resident of Zurich, Alfred-Adekeye was only in town for a few days for the deposition, but the U.S. Department of Justice tipped off Canadian authorities, telling them to look for him at Vancouver’s Wedgewood Hotel.

The U.S. Department of Justice accused Alfred-Adekeye of using a Cisco employee’s user ID and password to download software and access Cisco’s restricted website, according to the Canadian arrest warrant issued in the case.

The case is still under seal as U.S. authorities try to extradite Alfred-Adekeye. His arrest had gone unreported until this week, when Vancouver media reported his extradition hearing. Alfred-Adekeye’s U.S. arrest warrant was issued May 19, 2010 — the day after he began his deposition in Canada — by U.S. Magistrate Judge Howard Loyd in the U.S. District Court for the Northern District of California, according to the Canadian warrant.

The dapper Alfred-Adekeye has founded two nonprofit efforts aimed at fostering entrepreneurship — Road to Entrepreneurial Leadership and The African Network — and he’s also the head of two startups. On one of his Web sites he describes himself as, “a successful British entrepreneur and innovator of royal African descent.”

One of Alfred-Adekeye’s companies, Multiven, sued Cisco in December 2008, accusing the company of monopolizing the business of servicing and maintaining Cisco enterprise equipment. Cisco forced owners of gear such as routers, switches and firewalls to buy its SMARTnet service contracts in order to get regular software updates and bug fixes, Multiven said. By providing updates and bug fixes only to SMARTnet customers and not to third parties, Cisco prevented independent companies from servicing its equipment, Multiven alleged.

The SMARTnet service is a hot-button issue with some customers, who feel that Cisco should provide basic bug fixes and software updates free of charge as Microsoft or Apple do.

Neither Alfred-Adekeye nor Multiven could immediately be reached for comment Tuesday, but according to the Vancouver Sun, his attorney claimed in court Monday that Cisco and the U.S. Department of justice colluded to arrest him during his deposition.

In an e-mail, a Cisco spokeswoman said Tuesday, “We strongly disagree with the majority of the content in [the Vancouver Sun] article,” adding that “the extradition is a matter between the two governments.”

After Multiven sued Cisco, the networking giant filed countersuits against Multiven, Alfred-Adekeye, and Pingsta, another company founded by Alfred-Adekeye. Multiven provides service and support for networking gear from multiple vendors. Pingsta advertises itself as an online platform for companies to hire engineers and buy cloud-based network expertise on a pay-per-use basis.

The companies settled their civil lawsuits in July 2010, a few months after Alfred-Adekeye’s arrest. Both sides dropped their claims and the companies paid their own legal costs.

A Maryland man has been sentenced to seven years in prison for leading a multimillion-dollar warranty fraud scheme aimed at Cisco Systems, the U.S. Justice Department announced.

Chinasa Iheanyi Frank, 39, of Gaithersburg, Maryland, was sentenced Thursday in U.S. District Court for the Eastern District of Virginia. Chinasa and partner Robert Kendrick Chambliss submitted 414 claims for repayment of Cisco 2007 to 2010, sending the pair of counterfeit Cisco equipment spare change, according to court documents.

Cisco returned more than 950 pieces of equipment for Chinasa and Chambliss, a value of U.S. $ 27 million, according to the Justice Department’s complaint in the case. Chinasa built counterfeit computer networking and telecommunications equipment the couple returned to Cisco, the Justice Department said in a press release.

Chief Judge James Spencer and Chambliss Chinasa ordered to pay about $ 18.8 million in restitution. Febrero7 Chinasa was convicted of one count of conspiracy to commit mail and wire fraud, eight counts of mail fraud, one count of wire fraud and one count of obstruction of official proceedings.

Chinasa and Chambliss, 31, of Henrico, Virginia, were indicted in August. Chambliss pleaded guilty Jan. 12 to conspiracy to commit mail fraud and wire fraud. He was sentenced on April 13 to 12 months and one day in prison.

Chambliss Chinasa paid $ 10.000 to $ 15.000 a month to help with the fraud scheme of the security, the Justice Department said in its complaint.

Flip shouldn’t be Cisco’s only fold in the challenging consumer market, industry watchers say.

Analysts are calling on the company to do more to divest itself of disappointing consumer product lines and operations in the wake of restructuring the unit and shuttering its Flip video camera business. Cisco might want to look at cutting loose Scientific-Atlanta cable set-top boxes and Linksys home routers, too.

“We still want Cisco to take additional aggressive action and we wish Cisco would have exited the consumer video and home networking markets altogether,” states Ittai Kidron of Oppenheimer & Co. in a report on Cisco’s moves titled “And Now the Flop.” “We also feel Cisco will need to restructure or exit its [Scientific-Atlanta] video systems business at some point given the unfavorable longer-term secular trends.”

Analysts have been calling on Cisco to either better align its consumer operations with its core business or slowly exit the market altogether following disappointing results in recent quarters. Cisco CEO John Chambers promised bold actions to turn the company around in a memo publicized by Cisco last week.

In addition to closing Flip – which it obtained by acquiring Pure Digital for $590 million in 2009 — Cisco gutted its Eos media and entertainment operating system and sent the technology to other market segments within the company. It also vowed to better align Linksys with core enterprise and service provider routing and switching businesses, and to merge its disappointing umi home TelePresence system with Cisco’s business video offerings.

Analysts say folding Flip is a positive first step for Cisco in restructuring its consumer operations, but the company needs to keep going.

“We were neutral at best on the pricey deal and our concerns regarding Cisco’s ability to differentiate/leverage Pure Digital appear to have come true,” Kidron states. “We’re still hoping for more. We think Cisco should consider completely exiting consumer video and scaled back home networking businesses. Overall, good start but more is needed.”

OPINION: Chambers makes good on promise, drops Flip. Who or what is next?

Wall Street was always a bit leery of Cisco’s creeping ambitions in the consumer market, according to Brian White at Ticonderoga Securities.

“The Street never fell in love with Cisco’s consumer strategy and the Flip product line was the epitome of this disdain,” White states in his report on Cisco’s consumer revamp. “Cisco‘s announcement to shut down the Flip product line is a wise decision, in our view, as the world has changed significantly over the past couple of years with the proliferation of smartphones such as Apple’s iPhone 4 offering similar capabilities. Additionally, investors were sour on the acquisition of Pure Digital since day one.”

Cisco’s consumer business was pinpointed as one of the reasons for the decline in product gross margin in Cisco’s second quarter. Sales of Scientific-Atlanta cable set-top boxes were down 29% in the second quarter. And Cisco’s new umi home TelePresence system “got crushed” at Christmastime, according to Chambers.

Cisco has decided to suspend its email Cisco software as a service, saying that customers are interested in social partnership and separate email.

Mail to Cisco, which was originally released as WebEx Mail, will be removed to allow customers to move to alternatives, Debra Chrapaty, manager of the company’s general collaboration software, said in a blog on Tuesday.

“The product has been well received, but have since learned that customers have come to see your email as a mature tool for general consumption compared to a long-term differential element of its strategy of collaboration,” said Chrapaty. “We’ve also heard that customers are willing to accept the new collaboration tools such as video and social programs.”

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