The US Department of Justice (DOJ) announced recently that a man has been arrested and charged for allegedly selling fraudulent and counterfeit Cisco products. The suspect is 38-year-old Onur Aksoy of Miami, owner of Pro Network, who is allegedly also known as Ron Aksoy and Dave Durden. According to authorities, he was the CEO of at least 19 companies collectively tracked as Pro Network Entities the organization that bought fake Cisco networking equipment from China and Hong Kong and sold it in the United States and elsewhere. Allegedly, Aksoy imported tens of thousands of fake Cisco devices from China and Hong Kong. He later founded at least 19 companies called “Pro Network” in New Jersey and Florida to help him sell the hardware originally through e-commerce sites.[1]
The fake products had counterfeit Cisco labels, stickers, boxes and documentation to appear new, genuine and of high quality. In reality, many of them were older Cisco products that had been discarded or sold and then modified by the Chinese supplier. “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 DOJ spokesman said.[2] Cisco reportedly lost billions of dollars.
The fraudulent and counterfeit products sold by the Pro Network Entities suffered from numerous performance, functionality, and safety problems. 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. Customers of Aksoy’s fraudulent and counterfeit devices included hospitals, schools, government agencies, and the military.
As set forth in the DOJ indictment, between 2014 and 2022, US Customs and Border Protection (CBP) seized approximately 180 shipments of counterfeit Cisco devices being shipped to the Pro Network Entities from China and Hong Kong. In response to some of these seizures, Aksoy allegedly falsely submitted 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 allegedly broke the shipments up into smaller parcels and shipped them on different days, and Aksoy used at least two fake delivery addresses in Ohio. After CBP seized a shipment of counterfeit Cisco products to Aksoy and the Pro Network Entities and sent a seizure notice, Aksoy allegedly often continued to order counterfeit Cisco products from the same supplier.
According to the indictment, between 2014 and 2019, Cisco sent seven letters to Aksoy asking him to cease and desist his trafficking of counterfeit goods. Aksoy allegedly 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 and seized 1,156 counterfeit Cisco devices with a retail value of over $7 million.
The fake devices were acquired for significantly lower prices compared to the original equipment, in some cases for as much as 99% cheaper. The devices were then sold at big discounts compared to the original products. Aksoy allegedly wired at least $55 million to his suppliers and generated at least $100 million in gross revenue through this scheme. Authorities say he derived millions of dollars for his personal gain. Investigators estimated that tens of thousands of counterfeit Cisco devices were distributed via the scheme. Had it been new and genuine, the equipment would have been worth roughly $1 billion.
The DOJ spokesman says the fake devices were sold on Amazon, eBay and through direct sales on the websites of the fake companies set up by the man. The equipment was acquired by hospitals, schools, government agencies and even the military. The devices often malfunctioned, in some cases costing users tens of thousands of dollars.
The DOJ has made available a list of Pro Network companies, as well as eBay and Amazon storefronts used by Aksoy. Potential victims are advised to get in touch with authorities.
The news of Aksoy’s arrest comes just weeks after Cisco informed customers to upgrade the IOS software on some switch models to ensure that the devices are not counterfeit.
In addition to performance and functionality problems, counterfeit devices can introduce significant security risks. In 2020, F-Secure https://www.f-secure.com reported finding two fake Cisco switches on a customer’s network. The cybersecurity firm was asked at the time to look for the presence of backdoors. While no backdoors were identified, its researchers did notice that the devices had exploited a zero-day vulnerability that allowed bypassing security restrictions.
Red Sky Alliance is a Cyber Threat Analysis and Intelligence Service organization and has provided cautionary warnings about buying hardware and software at enticing cheap prices: https://redskyalliance.org/redshorts2020/8-buyer-beware-november-25-2020 The Latin word CAVEAT EMPTOR – means – BUYER BEWARE. So, Beware!! For questions, comments or assistance, please contact the office directly at 1-844-492-7225, or feedback@wapacklabs. com
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[1] https://www.justice.gov/opa/pr/ceo-dozens-companies-and-entities-charged-scheme-traffic-estimated-1-billion-fraudulent-and
[2] https://www.securityweek.com/ceo-accused-making-millions-sale-fake-cisco-devices
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