A Florida resident’s multi-year scheme selling counterfeit and fraudulent Cisco networking equipment that yielded over $100 million in revenue impacted government agencies and the military, the Justice Department said Tuesday.
The counterfeit devices had “numerous performance, functionality, and safety problems” and their failures caused “significant damage to their users’ networks and operations – in some cases, costing users tens of thousands of dollars,” the DOJ said.
The disclosure that the military and government were among the customers of equipment was included in the DOJ’s announcement that Onur Aksoy, 39, pleaded guilty to the operation in the District of New Jersey on Monday.
The DOJ didn’t immediately provide more information about the purchases by the government agencies and military. The release didn’t include details about which agencies purchased the fraudulent equipment.
Aksoy, who is a dual citizen in the US and Turkey, was the CEO of at least 19 companies based in New Jersey and Florida, 15 Amazon storefronts, and 10 eBay storefronts that sold the counterfeit goods, the DOJ said. Those companies and storefronts were known collectively as the “Pro Network Entities.”
The scheme operated by importing “tens of thousands of low-quality, modified computer networking devices” from China and Hong Kong that were made to appear new with counterfeit Cisco labels, documentation, packaging, and software, the DOJ said.
“The Chinese counterfeiters often added pirated Cisco software and unauthorized, low-quality, or unreliable components – including components to circumvent technological measures added by Cisco to the software to check for software license compliance and to authenticate the hardware,” the DOJ said.
The department estimated the total retail value of those devices was in the hundreds of millions of dollars.
Cisco asked Aksoy to cease and desist trafficking the equipment in seven letters sent to him between 2014 and 2019, the DOJ said. Askoy’s attorney responded twice with forged documents.
Askoy pleaded guilty to mail fraud and “conspiring with others to traffic in counterfeit goods, to commit mail fraud, and to commit wire fraud.”
His sentencing is scheduled for Nov. 6 where he’ll face four to six-and-a-half years in prison, under a plea agreement conditionally accepted by the court Monday, the DOJ said. He will also forfeit $15 million in gains from the scheme and pay back victims in full under that agreement.
A Cisco spokesperson said: “We are committed to protecting our valued customers and legitimate authorized Cisco channel partners and maintaining the integrity and quality of Cisco products and services. We thank our colleagues in U.S. law enforcement for their investigative actions, the successful indictment, and the work that led to today’s outcome.”
They added: “The Cisco Brand Protection team also appreciates the strong collaboration with Amazon’s CCU for jointly making the criminal referral that brought this individual to justice.”
Director of Amazon’s Counterfeit Crimes Unit Kebharu Smith said: “This guilty plea sends a strong message to bad actors that selling counterfeits has severe consequences.”
He added: “We are grateful for the collaboration with Cisco and the work of the U.S. Department of Justice to bring this counterfeiter to justice.”
Editor’s note, 6/8/23: This story was updated to include comment from Amazon.