Postal Inspectors: Counterfeit Computer Chips Cost Consumers Millions

PHILADELPHIA, PA -- Be honest, these days it's pretty hard to function without a computer. So if yours starts acting up, you may be tempted to try to fix it yourself. You buy everything else on line -- so why not computer parts, right? U.S. Postal Inspectors warn of one conman who made big bucks selling counterfeit computer chips and left behind a long list of cheated consumers.

U.S. Postal Inspector Alex Sylvester said Ronald Graban realized he could make a very healthy profit. Sylvester said, "He would purchase the chips for about $2.00 apiece in China and sell them in the us for several hundred dollars."

Postal inspectors said Graban had inside information on exact serial numbers that Cisco and Nortel use. So, when he requested labels from China, they would put those exact numbers on there to try and hide that they were counterfeit chips and sell them to a third party retailer.

Sylvester said, "It was reported to be a refurbished Cisco and Nortel product but in fact it wasn't. It was a counterfeit product from China." Business was good. In fact, authorities say Graban made more than $3 million until the chips began malfunctioning.

Sylvester said, "The customer would go back to Cisco and Nortel and request a refund. And Cisco and Nortel would check their records and discover they never sold them to that customer."

At the same time, border patrol agents started to see more chips and separate labels coming into the country and called postal inspectors.

Postal Inspectors offered this advice: If you're going to purchase anything like a Gb or any other computer component we suggest going to the manufacturer directly.

If not, there are several suppliers that are all legitimate and do offer warranties on products.

Graban was caught and pleaded guilty to mail fraud and money laundering. He faces 20 years in prison on the mail fraud charges and 10 on the money laundering. He is still awaiting sentencing.

Our friends at Consumer Reports have several tips on how to spot counterfeit products and links to sites that may help you figure it out. Click here for that information.


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