U.S. Department of Justice
Office of Public Affairs
May 2, 2024
A Florida resident and dual citizen of the United States and Turkey was sentenced yesterday to six years and six months in prison for running an enormous operation over many years to traffic in fraudulent and counterfeit Cisco networking equipment.
Under the terms of the plea agreement, Onur Aksoy, 40, of Miami, agreed to pay restitution of $100 million to Cisco and amounts to other victims that will be determined by the court at a later date, and to permit destruction of millions of dollars of counterfeit goods seized from his businesses.
“Aksoy sold hundreds of millions of dollars’ worth of counterfeit computer networking equipment that ended up in U.S. hospitals, schools, and highly sensitive military and other governmental systems, including platforms supporting sophisticated U.S. fighter jets and military aircraft,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Criminals who flood the supply chain with low-quality networking equipment from China and Hong Kong harm U.S. businesses, pose serious health and safety risks, and compromise national security. This case—one of the largest counterfeit trademark cases ever prosecuted in the United States—demonstrates the Criminal Division’s commitment and capacity to prosecute the most complex counterfeiting schemes and bring the perpetrators to justice.”
“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. Yesterday’s sentence, made possible by the investigation and prosecution of this office and our department and agency partners, now brings Aksoy to justice and holds him accountable for the breathtaking scale of his operation.”
According to court documents and statements made in court, Aksoy 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). The Pro Network Entities 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. The Pro Network Entities generated over $100 million in revenue from the scheme, and Aksoy personally received millions of dollars.
“Protecting the integrity of the supply chain for everyday consumers, government agencies, and our warfighters remains a top priority for Homeland Security Investigations,” said Special Agent in Charge Eddy Wang of Homeland Security Investigations (HSI) Los Angeles. “My office and our partners will continue to work diligently to remove counterfeit products that adversely affect public health and safety from the stream of commerce and hold the offenders accountable.”
“Mr. Aksoy’s sentencing brings closure to his years-long, greed-driven scheme that wasted U.S. taxpayer dollars and degraded our nation’s military readiness when he and his companies knowingly defrauded the Department of Defense by introducing counterfeit products into its supply chain that routinely failed or did not work at all,” said Special Agent in Charge Bryan D. Denny of the Department of Defense (DoD) Office of Inspector General, Defense Criminal Investigative Service (DCIS) Western Field Office. “In doing so, he sold counterfeit Cisco products to the DoD that were found on numerous military bases and in various systems, including but not limited to U.S. Air Force F-15 and U.S. Navy P-8 aircraft flight simulators.”
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. The products often failed to operate or otherwise malfunctioned, causing significant damage to their users’ networks and operations. Customers of Aksoy’s devices included hospitals, schools, and government agencies. In addition, numerous counterfeit devices originating from the Pro Network Entities were discovered in highly sensitive governmental applications, such as classified information systems. The devices were also identified in combat and non-combat operations of the U.S. Navy, U.S. Air Force, and U.S. Army, such as platforms supporting the F-15, F-18, and F-22 fighter jets, AH-64 Apache attack helicopter, P-8 maritime patrol aircraft, and B-52 Stratofortress bomber aircraft.
“This case should serve as a warning to those who attempt to sell counterfeit goods to the U.S. government,” said Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office. “NCIS is committed to safeguarding the Department of Navy acquisition programs that enhance fleet readiness.”
“Companies should be honest in their dealings with the government,” said Deputy Inspector General Robert C. Erickson of the General Services Administration Office of Inspector General (GSA-OIG). “GSA-OIG special agents are committed to working with investigative partners to hold accountable fraudsters who sell counterfeit equipment to the United States.”
Between 2014 and 2022, Customs and Border Protection (CBP) seized approximately 180 shipments of counterfeit Cisco devices that were sent to the Pro Network Entities from China and Hong Kong. Aksoy responded to some of these seizures by falsely submitting 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 sent on different days, and Aksoy used fake delivery addresses in Ohio.
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 that led to the seizure of approximately 1,156 counterfeit Cisco devices with a retail value of over $7 million.
Aksoy pleaded guilty in June 2023 to conspiring with others to traffic in counterfeit goods and to commit mail fraud, wire fraud, and mail fraud.
HSI, DCIS, NCIS, GSA-OIG, and CBP investigated the case. The CBP’s Electronics Center of Excellence, Los Angeles National Targeting and Analysis Center, and Office of Trade, Regulatory Audit and Agency Advisory Services, Miami Field Office provided valuable assistance.
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.
Source: U.S. Department of Justice press release.
