CEO of Dozens of Companies Pleads Guilty to Massive Scheme to Traffic in Fraudulent and Counterfeit Cisco Networking Equipment

FOR IMMEDIATE RELEASE
Tuesday, June 6, 2023
CEO of Dozens of Companies Pleads Guilty to Massive Scheme to Traffic in Fraudulent and Counterfeit Cisco Networking Equipment
A Florida resident and dual citizen of the United States and Turkey pleaded guilty yesterday in the District of New Jersey to running an extensive operation over many years to traffic in fraudulent and counterfeit Cisco networking equipment.

According to documents filed in this case and statements made in court, Onur Aksoy, 39, of Miami, ran at least 19 companies formed in New Jersey and Florida, as well as approximately 15 Amazon storefronts and at least 10 eBay storefronts (collectively, the “Pro Network Entities”), that imported from suppliers in China and Hong Kong tens of thousands of low-quality, modified computer networking devices with counterfeit Cisco labels, stickers, boxes, documentation, and packaging, all bearing counterfeit trademarks registered and owned by Cisco, that made the goods falsely appear to be new, genuine, and high-quality devices manufactured and authorized by Cisco. The devices had an estimated total retail value of hundreds of millions of dollars. Moreover, the Pro Network Entities generated over $100 million in revenue, and Aksoy received millions of dollars for his personal gain.

The devices the Pro Network Entities imported from China and Hong Kong were typically older, lower-model products – some of which had been sold or discarded – which Chinese counterfeiters then modified to appear to be genuine versions of new, enhanced, and more expensive Cisco devices. 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. Finally, to make the devices appear new, genuine, high-quality, and factory-sealed by Cisco, the Chinese counterfeiters added counterfeited Cisco labels, stickers, boxes, documentation, packaging, and other materials.

Fraudulent and counterfeit products sold by the Pro Network Entities suffered from numerous performance, functionality, and safety problems. Often, they would simply fail or otherwise malfunction, causing significant damage to their users’ networks and operations – in some cases, costing users tens of thousands of dollars. Customers of Aksoy’s fraudulent and counterfeit devices included hospitals, schools, government agencies, and the military.

Between 2014 and 2022, Customs and Border Protection (CBP) seized approximately 180 shipments of counterfeit Cisco devices being shipped to the Pro Network Entities from China and Hong Kong. In response to some of these seizures, Aksoy falsely submitted official paperwork to CBP under the alias “Dave Durden,” an identity that he used to communicate with Chinese co-conspirators. To try to avoid CBP scrutiny, Chinese co-conspirators broke the shipments up into smaller parcels and shipped them on different days, and Aksoy used fake delivery addresses in Ohio. After CBP seized a shipment of counterfeit Cisco products to Aksoy and the Pro Network Entities and sent a seizure notice, Aksoy often continued to order counterfeit Cisco products from the same supplier.

Between 2014 and 2019, Cisco sent seven letters to Aksoy asking him to cease and desist his trafficking of counterfeit goods. Aksoy responded to at least two of these letters by causing his attorney to provide Cisco with forged documents. In July 2021, agents executed a search warrant at Aksoy’s warehouse and seized 1,156 counterfeit Cisco devices with a retail value of over $7 million.

Aksoy pleaded guilty to (1) conspiring with others to traffic in counterfeit goods, to commit mail fraud, and to commit wire fraud and (2) mail fraud. He is scheduled to be sentenced on Nov. 6, and under the plea agreement that the court conditionally accepted yesterday pending sentencing, faces a sentence of four to six and a half years in prison. Also pursuant to the plea agreement, Aksoy must forfeit $15 million in illicit gains from his scheme and make full restitution to his victims. The court will determine the final sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; Attorney for the United States Vikas Khanna for the District of New Jersey; Acting Special Agent in Charge Eddy Wang of the Homeland Security Investigations (HSI) Los Angeles Field Office; Special Agent in Charge Bryan Denny of the U.S. Department of Defense, Defense Criminal Investigative Service (DCIS) Western Field Office; Special Agent in Charge Floyd Martinez of the General Services Administration Office of Inspector General (GSA-OIG), Southeast and Caribbean Division; Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service (NCIS), Economic Crimes Field Office; Special Agent in Charge Anthony Salisbury of the HSI Miami Field Office; and Special Agent in Charge Ricky J. Patel of the HSI Newark Field Office made the announcement today.

HSI, DCIS, GSA-OIG, NCIS, and CBP are investigating the case.

Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Andrew M. Trombly and Senior Trial Counsel Barbara Ward for the District of New Jersey are prosecuting the case.

The CBP Electronics Center of Excellence; the CBP Los Angeles National Targeting and Analysis Center; and the CBP Office of Trade, Regulatory Audit and Agency Advisory Services, Miami Field Office provided valuable assistance.

If you believe you are a victim of Aksoy or the Pro Network Entities, please visit www.justice.gov/largecases or www.justice.gov/usao-nj/united-states-v-onur-aksoy-pro-network for more information.

The Pro Network Entities include at least the following:

  Topic(s): CybercrimeFinancial FraudComponent(s): <a href="http://www.justice.gov/criminal/" rel="noreferrer noopener" target="_blank">Criminal Division</a><a href="https://www.justice.gov/criminal-ccips" rel="noreferrer noopener" target="_blank">Criminal - Computer Crime and Intellectual Property Section</a><a href="http://www.justice.gov/usao-nj" rel="noreferrer noopener" target="_blank">USAO - New Jersey</a>Press Release Number: 23-629    


  Updated June 6, 2023<a href=https://www.justice.gov/opa/pr/ceo-dozens-companies-pleads-guilty-massive-scheme-traffic-fraudulent-and-counterfeit-cisco>Original Article</a>