Man who sold counterfeit Cisco networking gear on eBay and Amazon sentenced to six years in jail – Military, school and government agencies were victims of fraud scheme

Cisco
(Image credit: Cisco)

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. 

Roshan Ashraf Shaikh
Contributing Writer

Roshan Ashraf Shaikh has been in the Indian PC hardware community since the early 2000s and has been building PCs, contributing to many Indian tech forums, & blogs. He operated Hardware BBQ for 11 years and wrote news for eTeknix & TweakTown before joining Tom's Hardware team. Besides tech, he is interested in fighting games, movies, anime, and mechanical watches.

TOPICS
  • parkerthon
    Uhh what? why are these government agencies buying gear off of ebay and amazon resellers as opposed to certified resellers?! This is honestly the absolute biggest issue here. I mean you can’t do any work for government as a service provider, seller, contractor, etc without an absurd amount of bureaucratic paperwork, but their IT can just go buy random crap off ebay to chuck in their datacenter?
    Reply
  • kanewolf
    Maybe via Amazon. Having done a LOT of procurement in the DOD area, the requirements for vendors are pretty rigorous. I doubt too much was in the military.
    Reply
  • Notton
    parkerthon said:
    Uhh what? why are these government agencies buying gear off of ebay and amazon resellers as opposed to certified resellers?! This is honestly the absolute biggest issue here. I mean you can’t do any work for government as a service provider, seller, contractor, etc without an absurd amount of bureaucratic paperwork, but their IT can just go buy random crap off ebay to chuck in their datacenter?
    It's so easy to accidentally buy from a reseller due to amazon's page design.
    Reply
  • vanadiel007
    parkerthon said:
    Uhh what? why are these government agencies buying gear off of ebay and amazon resellers as opposed to certified resellers?! This is honestly the absolute biggest issue here. I mean you can’t do any work for government as a service provider, seller, contractor, etc without an absurd amount of bureaucratic paperwork, but their IT can just go buy random crap off ebay to chuck in their datacenter?

    It's simple: government agencies who want to fly under the radar on purpose, will purchase from Ebay, Amazon and other sources to ensure they are not listed anywhere as purchasers of equipment.

    I bet there's a lot more of them than you think...
    Reply
  • kanewolf
    vanadiel007 said:
    It's simple: government agencies who want to fly under the radar on purpose, will purchase from Ebay, Amazon and other sources to ensure they are not listed anywhere as purchasers of equipment.

    I bet there's a lot more of them than you think...
    Not in my experience. They use contractors that have no public affiliation with them. Much easier for Lockheed to purchase hardware that MIGHT be for any of 100 different customers and 1000 different contracts. Hide the trees in the open in the forest.
    Reply
  • USAFRet
    parkerthon said:
    Uhh what? why are these government agencies buying gear off of ebay and amazon resellers as opposed to certified resellers?! This is honestly the absolute biggest issue here. I mean you can’t do any work for government as a service provider, seller, contractor, etc without an absurd amount of bureaucratic paperwork, but their IT can just go buy random crap off ebay to chuck in their datacenter?
    "He ran the operation under the name 'Pro Network Entities,' which had nineteen companies and 25 eBay and Amazon storefronts"

    With the right 'marketing', a LOT of things get sold to the govt.

    "Minority owned" or "small business" for example, often goes to the head of the line for consideration.
    A convincing powerpoint, and poof...you're selling 100 at a time.
    Reply
  • Jorsher
    I work with a service branch's team that procures/engineers an entire theater's sprawling network. Policy requires everyone in this branch purchases their hardware through a system the branch operates. The system was created both to save money and avoid this type of situation. You list your hardware requirements, approved/vetted vendors will give a quote, and you choose the one that meets the cost/time constraints. I don't know for sure, but I would believe the other branches have something similar as a DoD policy requirement. Supply chain risks are well-known and have been for quite a while.

    I'm also curious how any of this ended up with military. Maybe small units that purchase equipment on their own and don't know any better? Commercial ISPs using counterfeit equipment at the demarc? Defense contractors' network extensions ignoring policy either through malice to save a few dollars?

    My team has never had a problem telling someone 'no' when they've wanted to buy from unauthorized sources. Mission impact from garbage equipment these folks were selling can be significant, but it fortunately doesn't sound like it was tampered to impact confidentiality/integrity. Will be using this incident as an example of 'why' next time someone does...
    Reply
  • Eximo
    More likely preferred suppliers buying this stuff and then re-selling to the government agencies.

    I work at a public agency and we just buy straight from the vendor themselves. 90% of the time installation of major hardware is contracted out too.
    Reply
  • Dr3ams
    Me thinks Mr. Aksoy could have been working with the PRC. It's a golden opportunity for China to build in back doors in case the equipment is installed in a sensitive government network.
    Reply
  • toyotabedzrock
    Shouldn't restitution go to the buyer of the counterfeit products? Unless Cisco replaced the counterfeit devices for free.
    Reply