Cisco ready to pay $8.6 Million for selling flawed software to US Government

Cisco Systems has agreed to pay $8.6 million in order to settle claims that it sold video surveillance technology to federal, state and local government agencies, in spite of knowing that it had a significant security flaw.

Cisco has reportedly sold its technology to various government agencies, including Homeland Security, the Secret Service, the Army, the Navy, the Marines, the Air Force and the Federal Emergency Management Agency, according to a government complaint unsealed on Wednesday. The company is said to be paying civil damages in connection with the software now.

Eighteen states, including New York and California, and the District of Columbia joined the Justice Department in the claim against Cisco.

Cisco happens to be one of the world’s largest sellers of software and equipment to businesses and governments. The case was filed in the Federal District Court for the Western District of New York under the False Claims Act, which addresses fraud and misconduct in federal government contracts.

The government said the video surveillance software it bought from Cisco was “of no value” because it did not “meet its primary purpose: enhancing the security of the agencies that purchase it.” In many cases, the Cisco software actually reduced the protection provided by other security systems, the complaint said.

Cisco said in a statement that it was pleased to resolve the dispute. “There was no allegation or evidence that any unauthorized access to customers’ video occurred as a result of the architecture,” Robyn Blum, a Cisco spokeswoman, said in a statement.

The software vulnerability was identified in 2008 by James Glenn, who was working as a Cisco subcontractor in Denmark. He discovered that he could hack into the video software and take over the surveillance system without being detected, according to his lawyers at Constantine Cannon.

Cisco continued to sell the software with the vulnerability until July 2013, when the company let customers know about the flaw and released a way to fix the problem.