Cybercrime , Fraud management and cybercrime , Legislation and litigation
19 companies, 15 Amazon storefronts and 10 eBay storefronts involved
Prajeet Nair (@prajeetspeaks) •
July 9, 2022
A federal grand jury has indicted a 38-year-old Florida man for allegedly selling more than $1 billion worth of counterfeit Cisco networking equipment to customers around the world, including hospitals, schools, government agencies and the army.*
Onur Aksoy, aka Ron Aksoy, aka Dave Durden allegedly orchestrated a massive and fraudulent operation smuggling counterfeit goods from at least as early as August 2013 through 2022, according to the US Department of Justice.
During this period, Aksoy, using suppliers based in China and Hong Kong, imported counterfeit and shoddy computer networking devices designed to look like new, genuine devices manufactured by Cisco.
According to his indictment.
Aksoy is charged with one count of conspiracy to traffic counterfeit goods and commit mail and wire fraud; three counts of postal fraud; four counts of wire fraud; and three counts of counterfeit trafficking.
The indictment says Aksoy was charged in a criminal complaint filed in New Jersey on June 29 and was arrested in Miami the same day.
A Cisco spokesperson was not immediately available to comment on the development.
Aksoy allegedly ran at least 19 companies formed in New Jersey and Florida as well as at least 15 Amazon storefronts, at least 10 eBay storefronts and several other entities collectively referred to as the “Professional Network Entities”.
Pro Network Entities have imported thousands of fraudulent and counterfeit Cisco network devices from China and Hong Kong, modified by Chinese counterfeiters to appear as genuine versions of new, improved, and more expensive Cisco devices. He then “resold them to customers in the United States and abroad, misrepresenting the products as new and genuine. The operation reportedly generated more than $100 million in revenue and Aksoy received millions of dollars for personal gain,” the Justice Department said. .
“Chinese counterfeiters often added pirated Cisco software and unauthorized, low-quality, or unreliable components, including components to circumvent technological measures Cisco added to the software to verify software license compliance and authenticate hardware “, according to the indictment.
Fraudsters also ensured that these products appeared new, genuine, high-quality, and factory-sealed by applying counterfeit Cisco labels, stickers, boxes, literature, packaging, and other materials.
The US Department of Justice claims that fraudulent and counterfeit products sold by Pro Network entities suffered from numerous performance, functionality, and security issues.
“Often, they simply broke down or malfunctioned, causing significant damage to their users’ networks and operations – in some cases, costing users tens of thousands of dollars. Customers of fraudulent and counterfeit devices from Aksoy included hospitals, schools, government agencies and the military,” the Justice Ministry said.
According to the indictment, between 2014 and 2022, Customs and Border Protection (CBP) authorities seized approximately 180 shipments of counterfeit Cisco devices shipped to Pro Network entities from China and Hong Kong.
The indictment alleges Aksoy submitted official documents to authorities under the name “Dave Durden”, an identity he used to communicate with the Chinese co-conspirators.
“In an attempt to avoid CBP scrutiny, the Chinese co-conspirators allegedly split the shipments into smaller packages and shipped them on separate days, and Aksoy used at least two fake delivery addresses in Ohio. After CBP seized a shipment of counterfeit Cisco products from Aksoy and the Pro Network entities and issued a Notice of Seizure, Aksoy often allegedly continued to order counterfeit Cisco products from the same vendor,” the DOJ claims.
The indictment also alleges that between 2014 and 2019, Cisco sent seven letters to Aksoy asking him “to cease and desist from dealing in counterfeit products.”
“Aksoy reportedly responded to at least two of these letters by forcing his lawyer to provide Cisco with false documents. In July 2021, officers executed a search warrant at Aksoy’s warehouse and seized 1,156 counterfeit Cisco devices from ‘a retail value of more than $7 million,’ says the DOJ.
*Correction Jul 10, 2022 00:04 UTC: Clearly states that Aksoy has been indicted by a grand jury.