Florida-based Onur Aksoy, who owns a group of companies that operated several online stores, was sentenced to six and a half years in prison after being proven guilty of selling $100 million worth of counterfeit Cisco network devices to several government, school, and military organizations. He also sold these products as new via Amazon and eBay customers in the U.S. and internationally.
According to court documents, Aksoy, who also held dual citizenship with Turkey, imported many modified network products via China and Hong Kong. He ran the operation under the name 'Pro Network Entities,' which had nineteen companies and 25 eBay and Amazon storefronts. Upon investigation, it was found that the networking gear used components from the older models modified to look like the newer, expensive devices.
The products were also packed in counterfeit Cisco boxes containing documentation, labels, stickers, and other materials to make the product look genuine. As one would expect, these devices had performance issues that often led to failures, affecting many critical operations usually engaged by several government agencies. The fraudulent acts were even more serious because the devices were used in many combat and non-combat operations, leading to a multi-year investigation.
"Through an elaborate, years-long scheme, Aksoy created and ran one of the largest counterfeit-trafficking operations ever," said Attorney for the United States Vikas Khanna for the District of New Jersey. "His operation introduced tens of thousands of counterfeit and low-quality devices trafficked from China into the U.S. supply chain, jeopardizing both private-sector and public-sector users, including highly sensitive U.S. military applications like the support platforms of U.S. fighter jets and other military aircraft."
The Almost Ten-Year Investigation
The US Customs and Border Protection were able to intercept 180 shipments of counterfeit goods between 2014 and 2022, but Aksoy used fake aliases and delivery addresses to avoid scrutiny. Later, he instructed his offshore suppliers to send the goods in smaller packages to reduce suspicion. These confiscations did not deter Aksoy from stopping this operation, as the counterfeit products were 98% cheaper than their original counterparts, making it too lucrative for him to give up. Because of such tactics, the authorities took a long time to associate these goods with Aksoy's companies. The Department of Justice also said via a press release that Cisco did send him seven cease and desist letters for trafficking counterfeit goods.
Eventually, in 2021, agents were awarded a search warranty against Akshoy's warehouse, where about 1,156 of these devices were found, valued at over $7 million. In June 2023, he pleaded guilty to conspiring with others to traffic in counterfeit goods and to commit mail fraud, wire fraud, and mail fraud. The case ended with Aksoy receiving a six-year prison sentence and being required to pay Cisco $100 million as restitution following the destruction of the counterfeit goods.
Despite the success, we should question the government agency's verification method for whitelisting such sellers who provide devices for sensitive government and military operations. The whole ordeal is reminiscent of another story involving two weapons dealers that inspired the movie 'War Dogs.'
The discovery and destruction of counterfeit goods are common globally; however, discovering the use of such devices will always be a cause of concern, knowing that the US government has banned goods from certain companies for national security reasons.
