Florida man accused of selling fake, broken Cisco devices from China to hospitals, schools, military
Plus, Oracle reportedly mulling laying off staff to cut costs by up to $1b
A Florida man has been accused of selling to hospitals, schools, and others fake and malfunctioning Cisco equipment imported from China.
Onur Aksoy, 38, of Miami, peddled the fraudulent and counterfeit networking gear via at least 19 of his own companies, and 25 or more storefront accounts he set up on Amazon and eBay, according to American prosecutors on Friday.
We're told the CEO imported – for a fraction of the price of real Cisco systems – tens of thousands of older, lower-end devices from China and Hong Kong, and flogged them as new, genuine, and higher-end expensive Cisco machines. The retail value of this equipment as offered was said to be over a billion dollars, and Aksoy allegedly sold it all for at least $100 million in revenue and personally pocketed millions of bucks.
Some of the equipment had been previously bought and discarded, it is claimed. In any case, prosecutors alleged, Chinese counterfeiters dressed up devices to appear to be new, real Cisco products, with pirated Cisco software and changes to the internal components to circumvent any of the genuine manufacturer's license checks.
These machines were, it is claimed, packaged up and sealed with fake Cisco labels and stickers, manuals, and other materials to make it all look above board. These boxes were then imported from the Middle Kingdom into the United States by Aksoy's Pro Network of companies, which then sold the bogus gear to hospitals, schools, government agencies, the military, and other customers, it is alleged.
And, it is claimed, these systems would just fail completely or not work correctly, disrupting computer networks and operations and costing users tens of thousands of dollars to correct.
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This scam, it is alleged, ran for years: US border officials intercepted about 180 of Aksoy's shipments into the States between 2014 and 2022, and it is claimed he provided inspectors with faked paperwork using the alias Dave Durden. His co-conspirators in China began breaking up their exports to Aksoy into smaller packages to avoid scrutiny, among other steps, we're told.
According to prosecutors, Cisco sent seven cease-and-desist demands to Aksoy between 2014 and 2019, and he allegedly replied with forged documents via his lawyer in an attempt to get the IT giant off his back. A spokesperson for Cisco told The Register on Friday:
We are committed to maintaining the integrity and quality of Cisco products and services. Cisco is grateful to law enforcement and customs officials for their tremendous collaboration in this investigation and to the Dept of Justice for bringing the perpetrator to justice.
In July 2021, we're told, Aksoy’s warehouse was raided by Uncle Sam and 1,156 counterfeit Cisco devices with a retail value of over $7 million were seized.
Aksoy, aka Ron Aksoy, was charged [indictment and complaint PDFs] and arrested at the end of June this year on one count of conspiracy to traffic in counterfeit goods and to commit mail and wire fraud; three counts of mail fraud; four counts of wire fraud; and three counts of trafficking in counterfeit goods.
If you fear you were one of his customers, prosecutors in New Jersey have set up a website here with more information on Aksoy's companies and storefronts. ®
In other enterprise news... Oracle has mulled cutting costs by up to $1 billion, which could result in thousands of layoffs by August, it was reported on Friday by The Information.
Staff in the US and Europe would be hit, mainly, it is claimed. According to chatter on Blind, workers have been let go in Oracle Advertising already, and gradual, rolling layoffs are expected in engineering, infrastructure, and security teams.
A spokesperson for Oracle was not immediately available to comment.