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The U.S. Federal Bureau of Investigation is taking the issue of counterfeit Cisco equipment very seriously, according to a leaked FBI presentation that underscores problems in the Cisco supply chain.

The presentation gives an overview of the FBI Cyber Division's effort to crack down on counterfeit network hardware, the FBI said Friday in a statement. "It was never intended for broad distribution across the Internet."

In late February the FBI broke up a counterfeit distribution network, seizing an estimated US$3.5 million worth of components manufactured in China. This two-year FBI effort, called Operation Cisco Raider, involved 15 investigations run out of nine FBI field offices.

According to the FBI presentation, the fake Cisco routers, switches and cards were sold to the US Navy, the US Marine Corps., the US Air Force, the US Federal Aviation Administration, and even the FBI itself.

One slide refers to the problem as a "critical infrastructure threat."

The US Department of Defense is taking the issue seriously. Since 2007, the Defense Advanced Research Projects Agency has funded a program called Trust in IC, which does research in this area.

Last month, researcher Samuel King demonstrated how it was possible to alter a computer chip to give attackers virtually undetectable back-door access to a computer system.

King, an assistant professor in the University of Illinois at Urbana-Champaign's computer science department, has argued that by tampering with equipment, spies could open up a back door to sensitive military systems.

In an interview on Friday, he said the slides show that this is clearly something that has the FBI worried.

The Department of Defense is concerned, too. In 2005 its Science Board cited concerns over just such an attack in a report.

Cisco believes the counterfeiting is being done to make money. The company investigates and tests counterfeit equipment it finds and has never found a "back door" in any counterfeit hardware or software, said spokesman John Noh. "Cisco is working with law enforcement agencies around the world on this issue."

The company monitors its channel partners and will take action, including termination of a contract, if it finds a partner selling counterfeit equipment, he said. "Cisco Brand Protection coordinates and collaborates with our sales organizations, including government sales, across the world, and it's a very tight integration."

The best way for channel partners and customers to avoid counterfeit products is to buy only from authorized channel partners and distributors, Noh said. They have the right to demand written proof that a seller is authorized.

The FBI doesn't seem satisfied with this advice, however. According to the presentation, Cisco's gold and silver partners have purchased counterfeit equipment and sold it to the government and defense contractors.

Security researcher King believes that the government is better off focusing on detection rather than trying to secure the IT supply chain, because there are strong economic incentives to keep it open and flexible -- even if this means there may be security problems. "There are so many good reasons for this global supply chain; I just think there's no way we can secure it."