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Feds: Florida Man Sold Counterfeit Cisco Gear In $1B Scam

Gina Narcisi

A man running more than 19 companies and online storefronts has been charged with reselling fake Cisco networking equipment and earning more than $100 million in revenue, an issue that Cisco said has only gotten worse due to supply chain shortages.

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A Florida man has been arrested and charged with importing and selling counterfeit Cisco networking equipment that if authentic, would be valued at more than $1 billion, the U.S. Department of Justice (DOJ) announced on Friday.

Ron Aksoy, also known as Dave Durden, has run at least 19 companies formed in New Jersey and Florida, as well as at least 15 Amazon storefronts and 10 eBay storefronts and multiple other entities over the last 12 years in which he allegedly imported tens of thousands of counterfeit Cisco networking devices from China and Hong Kong. He is said to have resold the gear to unwitting U.S. and overseas customers after falsely representing the products as new and genuine with fake Cisco labels, packaging, and documentation.

Aksoy has been charged with 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, according to the DoJ.

[Related: CISCO ON COMBATING GRAY MARKET, FRAUDSTERS ‘UNDERCUTTING’ $1.2B IN LEGIT CHANNEL BUSINESS WITH COUNTERFEIT GOODS ]

Customs and Border Protection (CBP) allegedly seized about 180 shipments of counterfeit Cisco devices that were being shipped to the Pro Network Entities -- a false company operated by Aksoy -- from China and Hong Kong between 2014 and 2022. The DoJ said that Aksoy’s scheme generated more than $100 million in revenue, which Aksoy retained a considerable share, and the rest was given to his co-conspirators.

A report published from Reuters said that Cisco sent at least seven cease-and-desist letters to Aksoy. The San Jose, Calif.-based tech giant did not respond to CRN’s request for comment on the matter prior to publication.

Global supply chain challenges and material shortages have slowed manufacturing and shipping for industries around the world. The issue has caused a rise in gray market activity, as well as something more nefarious: a surge in counterfeit IT products, Cisco told CRN in April.

Syracuse, N.Y.-based ComSource Inc., a Cisco partner, told CRN that the firm has missed out on deals thanks to counterfeit and gray market activity.

“The only conclusion we can come to is that it has to be a gray market product. We’ve seen that pretty regularly, especially in the last couple of years and especially because of the supply chain in the last year,” Michael J. Fay, ComSource’s president and CEO, told CRN.

Cisco Channel Chief Oliver Tuszik has introduced a consequences framework for partners procuring products outside of the Cisco supply chain in collaboration with the company’s Global Brand protection team, Al Palladin, Cisco’s legal director of the team told CRN in the Spring.

Cisco and its colleagues in the Alliance for Gray Market and Counterfeit Abatement (AGMA), which includes the likes of HPE, Juniper Networks, and Microsoft, have estimated the economic loss to channel partners exceeds $100 billion a year. From a Cisco perspective alone, the company estimates $1.2 billion a year in losses to Cisco partners that are displaced by other partners winning deals with counterfeit, or low-quality gray market gear or customers purchasing outside of the Cisco supply chain.

 

 

Learn More: Wireless
Gina Narcisi

Gina Narcisi is a senior editor covering the networking and telecom markets for CRN.com. Prior to joining CRN, she covered the networking, unified communications and cloud space for TechTarget. She can be reached at gnarcisi@thechannelcompany.com.

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