Former Employee of Texas Internet Company Sentenced to 15 Months for Scheme to Defraud Cisco of Computer Networking Equipment

SAN JOSE, CA—Ernesto Gabriel Haberli was sentenced yesterday to 15 months in prison and ordered to pay $449,711.15 in restitution for mail fraud, United States Attorney Melinda Haag announced.

Haberli pleaded guilty on September 30, 2011 to seven counts of mail fraud. According to the plea agreement, Haberli admitted to perpetrating a scheme to defraud Cisco Systems Inc. (Cisco) of more than $400,000 of computer networking equipment. Haberli schemed to defraud Cisco Systems under the SMARTnet service contract program, where Cisco agreed to provide customers with technical support, including advance hardware replacement, which allowed customers to obtain replacement equipment from Cisco immediately, without having first to return the broken part.

Haberli, 39, of Houston, worked as an employee of The Internet Group, a Texas corporation engaged in the business of offering Internet services to individuals and companies. According to court documents, from August 2006 to July 2007, Haberli fraudulently reported to Cisco more than 10 times that he was in possession of more than 50 failed Cisco networking parts that were covered under the SMARTnet warranty program, causing Cisco to send 51 computer networking parts to Haberli as replacements. Haberli sold the equipment to unsuspecting third parties, sometimes before requesting the part from Cisco and at other times shortly after receiving the part.

Haberli was charged by information on September 29, 2011. He was charged with seven counts of mail fraud for lying to Cisco about the failure of their networking equipment in order to obtain high-value replacement computer networking parts at no cost.

The sentence was handed down by U.S. District Court Judge Edward J. Davila following a guilty plea on seven counts in violation of Title 18, United States Code, Sections 1341 and 2-mail fraud and aiding and abetting. Judge Davila also sentenced the defendant to a three-year period of supervised release and ordered the defendant to pay restitution of $449,711.25 to Cisco. The defendant is scheduled to begin serving the sentence on June 21, 2012.

Richard C. Cheng is the Assistant United States Attorney who prosecuted the case, with the assistance of legal technician Tracey Andersen. The prosecution is the result of an investigation by the United States Postal Inspection Service and the Federal Bureau of Investigation.