Counterfeit Chips Raise Big Hacking, Terror Threats

As more computer chips are made overseas, the risk of hardware tampering increases, from stealing consumer data to crashing government networks. But how real is the threat? his past January, two brothers from Texas, Michael and Robert Edman, appeared in court to face federal charges of selling counterfeit computer equipment to, among others, the Air Force, Marine Corps, Federal Aviation Administration, Department of Energy, numerous universities and defense contractors such as Lockheed Martin. According to prosecutors, the pair, working largely out of Michael Edman's house in the rural town of Richmond, bought cheap network cards from a supplier in China. They also purchased labels and boxes carrying the logo of Cisco Systems, the U.S.-based hardware giant. Until a source in China tipped off the FBI, no one could tell that the parts were Cisco knockoffs rather than the real thing.

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