A Massachusetts computer parts supplier has pleaded guilty in federal court in San Jose to wire fraud and money laundering charges in a scheme that bilked Cisco Systems Inc. of $15 million. Michael Daly, 55, of Danvers, Mass., pleaded guilty before U.S. District Judge Ronald Whyte on Thursday. He will be sentenced by Whyte on July 27.U.S. Attorney Joseph Russoniello said Daly admitted in a plea agreement to obtaining replacement parts from Cisco in the names of fictitious companies and then selling the fraudulently obtained equipment to other hardware resellers between 2003 and 2007. Russoniello said Cisco Systems estimates its loss at more than $15 million.San Jose-based Cisco, with revenue of $39 billion last year, makes Internet networking hardware and software.Daly is president of Data Resource Group in Salisbury, Mass. He was indicted on wire fraud and money laundering charges in 2007. An FBI affidavit filed earlier in the case alleged that Daly carried out the fraud more than 1,300 times and used private mailboxes in 39 states to receive the equipment, which was then forward to his company in Massachusetts. The replacement parts were worth between $1,000 and $25,000 each. Daly obtained the equipment under a Cisco warranty program known as SMARTnet, in which customers can obtain hardware replacement parts immediately, before returning a broken part. He allegedly either did not return any defective parts or sent Cisco parts not covered by SMARTnet that were worth little or nothing. The wire fraud conviction carries a possible maximum sentence of 20 years in prison, but Daly’s penalty will be determined after consideration of federal sentencing guidelines.
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