Why it matters: It's no secret that China is the world's primary source of counterfeit hardware. For almost a decade, one man has sold vast quantities of fake Cisco systems to unsuspecting customers looking for a good deal on otherwise expensive networking equipment. This type of fraud can have serious economic ramifications when used to power critical infrastructure.

This week, a federal grand jury indicted a Florida man for allegedly selling more than $1 billion of counterfeit Cisco networking equipment to several individuals, hospitals, schools, government agencies, and even the military.

According to the Justice Department, 38-year-old Our "Ron" Aksoy was selling fake equipment from suppliers in China and Hong Kong. More specifically, he imported tens of thousands of devices through no less than 19 entities registered in New Jersey and Florida, collectively dubbed the "Pro Network."

Aksoy sold the products via multiple storefronts on e-commerce platforms like Amazon, eBay, and others. His operation supposedly raked in over $100 million in revenue, of which several million had been pocketed by the "Pro Network" CEO and used for personal gain.

The devices in question were older, lower-end Cisco systems that had been previously resold or discarded. Chinese counterfeiters modified them by adding pirated Cisco software and "unauthorized, low-quality, or unreliable components," essentially dressing them up to look like higher-end hardware. The suppliers also shipped the devices in genuine-looking packaging, with all the Cisco labels, stickers, and documentation.

Aksoy's customers mainly wanted a better deal on machines typically costing thousands or tens of thousands of dollars. As you'd expect, the equipment often failed, didn't work correctly, and performed well below expectations. Over time, that raised the cost of ownership well beyond the initial acquisition cost.

Cisco sent several cease-and-desist letters to Aksoy, but he had his lawyer provide forged invoices in a few instances. Between 2014 and 2022, Customs and Border Protection (CBP) seized around 180 shipments of counterfeit Cisco systems headed to the "Pro Network." However, Aksoy allegedly regained some of these seizures by submitting fake paperwork under an alias. He eventually worked with his suppliers to break the shipments into smaller parcels, hoping to avoid further scrutiny.

On June 29, the Department of Homeland Security filed a criminal complaint in New Jersey, leading to Aksoy's arrest in Miami the same day. If you suspect you or your organization may have been one of his customers, you can check here for a list of the various companies and storefronts that were used to sell counterfeit Cisco systems.

Companies like Amazon have been trying to curb the sale of fake products on their platforms for years, albeit with limited success. Customs officers seized counterfeit consumer tech products in 2021 in record numbers, especially smaller items like wearables.

Masthead credit: Johannes Weber