14 May 2024 -
 General

Prison for man who sold fake Cisco gear to US military and hospitals

US Justice

Onur Aksoy, a Florida-based supplier with dual US-Turkish citizenship, has been sentenced to over six years in prison for orchestrating an elaborate scheme that generated hundreds of millions in illicit revenue. Over nearly a decade, Aksoy established a sprawling network of at least 19 companies in the US, supported by approximately 15 Amazon storefronts and 10 eBay storefronts selling counterfeit Cisco networking equipment. His scheme exemplifies the rising sophistication of counterfeiters and the vulnerability of even robust supply chains to infiltration.

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. 

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division

The counterfeit operation relied on a global network. It’s reported that Aksoy sourced low-cost, used equipment from China and Hong Kong. This hardware, often previously discarded or obsolete, was repurposed by counterfeiters. They added pirated Cisco software, cheap components to evade anti-piracy measures, and counterfeit packaging, labels, and documentation to give the appearance of genuine, high-end Cisco products. This repackaged equipment could then be sold at a substantial premium, offering huge profit margins that fueled the scheme’s growth.

Extent and impact of the scheme

The scale of Aksoy’s operation is eye-opening: the Pro Network Entities, his network of companies, generated over $100 million in revenue, with millions flowing directly to Aksoy. U.S. Customs and Border Protection (CBP) intercepted approximately 180 shipments of fraudulent devices in transit to Aksoy’s operation. To evade scrutiny, Aksoy and his Chinese suppliers broke up shipments into smaller parcels and used fictitious delivery addresses, illustrating a deliberate intent to deceive authorities.

The most alarming aspect of this case is the wide range of victims involved. Counterfeit devices not only found their way into hospitals and schools but also into government applications. The U.S. Department of Defense (DoD), whose systems were compromised, found Aksoy’s fraudulent gear deployed in support of advanced military platforms including F-15, F-18, and F-22 fighter jets, as well as combat and non-combat operations across the U.S. Navy, Air Force, and Army. This infiltration poses significant national security risks alongside the compromised reliability of these devices.

Key takeaways for the electronics industry

This case underscores the urgency for proactive vigilance across the electronics industry:

  • Supply chains are complex and vulnerable: Globalised supply chains, even those associated with well-respected brands, can be infiltrated by counterfeiters with increasing skill and resourcefulness. Companies must implement robust counterfeit detection processes and rigorous supplier vetting to mitigate this risk.
  • Counterfeiters are evolving: Aksoy’s use of online marketplaces as a key distribution channel highlights the adaptability of counterfeiters to exploit vulnerabilities within even legitimate trading platforms.
  • Consequences are far-reaching: The financial, operational, and security risks of compromised electronics extend to both the commercial and public sector. Beyond immediate financial losses, companies face potential legal liability, critical system failures, and the erosion of trust from clients.

Thousands of senior engineers and procurement professionals subscribe to our LinkedIn Market Intel newsletter – get yours here

For more help with looking at supply chain options, contact Astute Electronics

Related News

22 May 2024 - General

TSMC accelerates global expansion with new European plant

Read more

17 May 2024 - General

Italy targets semiconductors with $10 billion investment push

Read more

16 May 2024 - General

Rising obsolescence risks threaten supply chains in the electronics industry

Read more

13 May 2024 - General

Upheaval in DRAM: 15-25% price increase possible

Read more

07 May 2024 - General

Kremlin ramps up sabotage efforts; electronics supply chains warned of threats

Read more

07 May 2024 - General

ESS Technology’s superb ES9039Q2M DAC available from Astute Group

Read more