A Miami-based CEO has been arrested for allegedly importing $1 billion worth of counterfeit Cisco equipment from China and then selling it on Amazon and eBay.
The Justice Department announced(Opens in a new window) today that he had indicted 38-year-old Onur “Ron” Aksoy for selling the counterfeit Cisco gear via numerous online storefronts.
Allegedly, Aksoy imported tens of thousands of fraudulent Cisco devices from China and Hong Kong. He then created at least 19 companies in New Jersey and Florida, dubbed the “Pro Network,” to help him resell the hardware as genuine through the e-commerce sites.
One of the sites Aksoy seems to be using to sell the Cisco gear.
“The operation allegedly generated over $100 million in revenue, and Aksoy received millions of dollars for his personal gain,” the Justice Department said.
The Cisco equipment Aksoy allegedly sold was usually older, lower-end models that were previously bought or discarded. Counterfeiters in China then modified the equipment, making the devices appear as if they were newer or more expensive Cisco product models.
“As alleged, 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 Justice Department said. In addition, the counterfeit products were packaged with authentic-looking labels, boxes, and documentation.
However, customers who bought the equipment would later realize the products were defective. “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,” the Justice Department said. “Customers of Aksoy’s fraudulent and counterfeit devices included hospitals, schools, government agencies, and the military.”
According to the US’s criminal complaint(Opens in a new window)Aksoy dates back to at least 2013. He was able to buy the counterfeit equipment at “95 to 98%” lower than the prices of genuine Cisco products.
The counterfeiting generated numerous complaints from buyers on Amazon and eBay. In response, Amazon and eBay suspended(Opens in a new window) or terminated the storefronts on their sites. But Aksoy repeatedly returned to the e-commerce platforms, creating new storefronts under different names between 2014 and 2020.
Cisco was also aware the counterfeit scheme was going on. From 2014 to 2019, the company sent seven cease-and-desist letters to Aksoy, demanding he end the counterfeiting scam.
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At the same time, US Customs and Border Protection seized about 180 shipments the Chinese counterfeiters tried to send to Aksoy over the past nine years. In July 2021, US agents also executed a search warrant and raided an Aksoy-operated warehouse, seizing 1,156 counterfeit Cisco devices with a retail value of over $7 million.
To evade investigation, Aksoy would sometimes use the alias Dave Durden. But last week, federal investigators arrested Aksoy in Miami on several fraud-related counts. As evidence, the criminal complaint against him cites numerous emails and messages Aksoy and his associates sent to counterfeit suppliers in China.
The Justice Department cataloged(Opens in a new window) the various Aksoy storefronts used on Amazon, eBay, and on his own websites to sell the goods. But at the moment, it remains unclear if victims will receive any restitution. Aksoy’s company Pro Network did not immediately respond to a request for comment.
In a statement, Cisco said: “We are committed to maintaining the integrity and quality of Cisco products and services. Cisco is grateful to law enforcement and customs officials for their tremendous collaboration in this investigation and to the DOJ for bringing the perpetrators to justice. “
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