Man faces 20 years in prison in counterfeit computer chip scheme

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MILWAUKEE (WITI) — Thinking about buying any parts for your computer? FOX6’s Contact 6 says beware — those parts could be fake!

“He would purchase the chips for about $2.00 a piece in China and sell them in the U.S. for several hundred dollars,” U.S. Postal Inspector Alex Sylvester said.

Ronald Graban, the mastermind in this scheme, realized he could make a very healthy profit.

“He 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 they were counterfeit chips,” Sylvester said.

Graban would then sell them to a third-party retailer.

“It was reported to be a refurbished Cisco and Nortel product but in fact it wasn`t. It was a counterfeit product from China,” Sylvester said.

Business was good. In fact, authorities say Graban made more than $3 million with this slight of hand — until the chips began malfunctioning.

“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,” Sylvester said.

At the same time, Border Patrol agents began to see more chips and separate labels coming into the country, and called postal inspectors.

“If you`re going to purchase any 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,” Sylvester said.

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 charges.

He is still awaiting sentencing.