Tech CEO of 19 firm gets 6-year sentence in US for counterfeit Cisco sales

The fake equipment compromised public and private sectors, including sensitive government systems used by the military

Onur Aksoy, the Miami-based chief executive of 19 companies, was sentenced to more than six years in prison on Friday for operating a scam involving the sale of counterfeit Cisco equipment, several media outlets reported.

Aksoy's plea deal mandates restitution payments totaling $100 million to Cisco and other victims. Aksoy, aka Ron Aksoy and Dave Durden, in June 2023 admitted guilty to charges of conspiracy, mail fraud, and wire fraud. Operating through 19 companies and online platforms from 2013 to 2022, he distributed fake Cisco products valued at over $1 billion, reports said.

These companies, collectively referred to as Pro Network Entities, peddled the counterfeit networking gear on Amazon and eBay.

The fake equipment infiltrated critical infrastructure in public and private sectors, including sensitive US government systems used by the Navy, Air Force, and Army. This jeopardised operations for various military aircraft and equipment.

Additionally, schools and hospitals unwittingly suffered from the substandard equipment, experiencing malfunctions or complete failures post-installation.

Despite detection by US authorities and Cisco in 2014, Aksoy persisted in his fraudulent activities, sourcing supplies from Chinese vendors who altered discarded Cisco products to mimic authenticity and loaded them with pirated software.

Vikas Khanna, the US attorney, underscored the enormity of the operation and the potential harm inflicted. Aksoy's sentencing holds him accountable for the "staggering scale" of the counterfeit enterprise, said Khanna.

Cisco has faced challenges in recent years due to disruptions in its supply chain, rendering it susceptible to counterfeit operations, the report added.

In February of this year, Cisco announced a reduction in its workforce as part of a restructuring effort. The company disclosed that over 4,000 positions, approximately 5 per cent of its global workforce, would be affected by the layoffs. This decision coincided with the release of its latest quarterly financial results.

With nearly 85,000 employees as of December last year, Cisco's downsizing reflected a broader trend in the tech industry, particularly in Silicon Valley, as companies increasingly focus on artificial intelligence.