Cisco scores a big win in anti-counterfeit enforcement

A company CEO based in Miami, Florida, has pleaded guilty to charges of importing hundreds of millions of dollars-worth of counterfeit Cisco networking equipment from China and Hong Kong and then selling it on Amazon and eBay.

Onur Aksoy (39) 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 known as the Pro Network – that were involved in the fraud.

He admitted importing “tens of thousands” of low-quality, modified computer networking devices with counterfeit Cisco labels, stickers, boxes, documentation, and packaging over several years, generating an estimated $100 million in sales including several million dollars for personal gain.

The devices the network imported 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 newer and more expensive Cisco devices, often with pirated Cisco software and unauthorised, low-quality, or unreliable components.

Some of those components were intended to circumvent technological measures added by Cisco to the software to check for software license compliance and to authenticate the hardware.  To make the devices appear new, they added counterfeited Cisco labels, stickers, boxes, documentation, packaging, and other materials.

The scam was operating between 2014 and 2022, and over that period Customs and Border Protection (CBP) intercepted around 180 shipments of the fakes. To try to avoid CBP scrutiny, Chinese co-conspirators broke the shipments up into smaller parcels and shipped them on different days, and Aksoy used fake delivery addresses in Ohio. He was reportedly able to buy the counterfeit equipment at a 95 to 98 per cent discount to genuine Cisco products.

“Fraudulent and counterfeit products sold by the Pro Network entities suffered from numerous performance, functionality, and safety problems,” says a Department of Justice statement.

“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 counterfeit devices ended up being installed in a number of sensitive locations, including hospitals, schools, government agencies, and the military.

Aksoy pleaded guilty to conspiring with others to traffic in counterfeit goods, to commit mail fraud, and to commit wire fraud, as well as mail fraud. He is due to be sentenced on November 6, and faces a sentence of four to six and a half years in prison under the terms of a plea deal.

Cisco is waging a war against counterfeiters, with some success, but the premium pricing their equipment commands makes them a constant target.

The company recommends that customers buy Cisco products only from authorised partners or directly from Cisco in order to minimize the risk of purchasing counterfeits.