OAKLAND, Calif. (CN) - Cisco Systems claims in court that one of its partners conspired with four other companies, and doctors, to defraud it of $10 million.
Cisco Systems Capital Corp. claims that the defendants made up financial information, created fake emails and altered information on some California state websites in order to get loans.
Cisco sued its authorized partner CGC Digital, the Diagnostic Imaging Network Medical Group, Healthcare System 2000, the Women's Medical Group of Tempe, the East Valley Women's Medical Group and six people, three of them doctors, on Jan. 23 in Alameda County Court.
Cisco claims CGC Digital took advantage of Cisco's "Channel" operation, in which users can lease Cisco products from Cisco's authorized partners, who buy the products from Cisco distributors.
Cisco claims CGC Digital enlisted the other defendants to create a series of "bogus lease transactions," built on a host of forged financial statements, invoices and other documents.
The forged documents induced Cisco to wire millions of dollars to CGC Digital to finance the fake transactions, Cisco claims.
Cisco says it believes that CGC transferred the money to a Wells Fargo account in Oakland, from which it gave the other defendants their cuts of the scheme.
It claims that the defendants intended to continually defraud the company in an ongoing conspiracy.
The defendants could not be reached for comment. They include Quinn Ngoc Rudin aka David Rudin, who Cisco says is "in federal custody in Alameda County with pending criminal charges that are related to the conduct complained of here".
The March 2013 federal indictment of Rudin is included as an attachment to Cisco's lawsuit.
Cisco seeks restitution of $10 million, an accounting, and damages for fraud, conversion, negligent misrepresentation and unfair business practices.
Cisco seeks at least $4 million, plus punitive damages, from CGC;
at least $2.5 million from Dr. Michael Dao and Michael Dao M.D., Inc.;
nearly $1.1 million from Dr. Stephine Kramer, Richard A. West, and Women's Medical Group of Tempe;
and $1.65 million from Sim Hoffman, John Clark, and/or Diagnostic Imaging.
Cisco is represented by Richard Nelson, with Sideman & Bancroft, in San Francisco.
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