CEO guilty of selling counterfeit Cisco devices to military, govt orgs

A Florida man has pleaded guilty to importing and selling counterfeit Cisco networking equipment to various organizations, including education, government agencies, healthcare, and the military.

The 39-year-old resident of Florida, Onur Aksoy, conducted the scheme through 19 companies formed in New Jersey and Florida and in several online storefronts, collectively known as ‘Pro Network Entities,’ 

Aksoy had a criminal complaint filed against him approximately a year ago, with the Department of Justice accusing him of running the counterfeit scheme between 2014 and 2022, making over $100,000,000 in the process.

A U.S. Department of Justice announcement published yesterday says Aksoy pleaded guilty in the U.S. District Court of New Jersey, admitting that he defrauded many people and companies by selling them low-quality equipment made to appear as new Cisco models.

“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,” says the Department of Justice press release.

The scheme

According to the DOJ, Pro Network Entities imported old, used, or low-grade network equipment from China and Hong Kong, having the exporters modify the equipment so it appears as genuine, brand-new Cisco devices.

Between 2014 and 2022, the U.S. Customs and Border Protection caught 180 shipments of counterfeit Cisco devices sent to Pro Network Entities.

Aksoy responded to these seizures by using fake aliases for the paperwork and a mock delivery address in Ohio to disassociate Pro Network Entities as much as possible and evade scrutiny from the authorities.

The Chinese vendors were subsequently instructed to send the products in smaller packages and on different days to minimize the odds of them becoming subject to examinations.

The Chinese sellers even added pirated Cisco software and incorporated components that would help bypass software license-checking mechanisms that Cisco software uses to verify it runs on genuine hardware.

The seemingly legitimate appearance of the devices was complemented by the addition of Cisco labels, stickers, sealed boxes, Cisco-branded documentation, and packaging that originated from the American tech giant.

However, buyers of those devices suffered from numerous performance, functionality, and security problems, with many reaching out to Cisco for support.

The networking company realized the nature of Aksoy’s business and sent him seven cease and desist letters between 2014 and 2019.

In July 2021, law enforcement agents executed a search warrant at Aksoy’s warehouse and found and confiscated over a thousand fake Cisco devices with a retail value of over $7,000,000.

Aksoy is scheduled for sentencing on November 6, 2023, facing a maximum penalty of 6.5 years in prison. The man must also forfeit $15,000,000, which will be given as restitution to the victims.

The U.S. DoJ has published a list of all ‘Pro Network Entities’ companies and eBay and Amazon storefronts that sold counterfeit equipment.

People or businesses that bought products from the listed shops are encouraged to follow the instructions provided on this dedicated page, which include emailing a questionnaire (not available yet) to a Homeland Security email address.

 

Source: https://www.bleepingcomputer.com/news/security/ceo-guilty-of-selling-counterfeit-cisco-devices-to-military-govt-orgs/

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