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Biz Owners Take Pleas After NJ Feds Seize Record $14M Worth Of Cisco Networking Knockoffs

Three North Jersey business owners admitted importing and selling cheap knockoffs of Cisco Systems networking equipment after federal agents seized an unprecedented $14 million worth of the devices from their warehouse in Passaic County.

U.S. Attorney for NJ Philip R. Sellinger credited special agents of HSI's Newark office & the Northeast Field Office of the U.S. DOD's Office of Inspector General's Defense Criminal Investigative Service with the investigation leading to the pleas.

U.S. Attorney for NJ Philip R. Sellinger credited special agents of HSI's Newark office & the Northeast Field Office of the U.S. DOD's Office of Inspector General's Defense Criminal Investigative Service with the investigation leading to the pleas.

Photo Credit: HSI.gov

Musa Karaman, 35, of North Arlington, was the last of the trio to take a deal from the government, pleading guilty to trafficking counterfeit goods in U.S. District Court in Newark on Thursday, Aug. 24.

Accomplices Sadri Ozturan, 37, of Hawthorne, and Israfil "David" Demir, 38, of Secaucus both pleaded guilty to the same charges on Aug. 8, U.S. Attorney for New Jersey Philip R. Sellinger said.

Sold throughout the world, Cisco's networking devices are used by U.S. government and military agencies, hospitals, schools, and other critical sectors, all of which can become "endangered by lower-quality counterfeits," a complaint on file in federal court in Newark says.

The switches and transceivers allow computers connected by a network to communicate with one another, says the complaint filed by Special Agent Robert S. Pinches of the U.S. Department of Homeland Security's Homeland Security Investigations office in Newark.

Karaman, Ozturan and Demir co-owned a business in Woodland Park that imported cheap imitations of the products, which "bore Cisco trademarks and were clearly designed and intended to mimic actual Cisco networking devices," Pinches wrote.

The products "often use pirated versions of Cisco software — in many cases, older and outdated software that does not necessarily operate correctly — leaving users exposed to security vulnerabilities," he added.

The trio got the devices from multiple counterfeiting suppliers headquartered in China and Hong Kong, none of whom were affiliated with Cisco Systems Inc. or were authorized to resell or distribute the American tech giant's products, the agent wrote.

Most of the shipments were addressed to the Woodland Park warehouse, although Pinches said the trio had some sent to their homes, including one that was addressed to Karaman's wife.

The partners sold the devices at higher prices in various places, including on multiple Amazon online storefronts and even directly from their own websites, the complaint says.

Cisco "sent multiple cease-and-desist letters" to the trio and their associates as far back as April 2019, Pinches added, but that didn't stop them.

Investigators pored over bank records, records of deliveries by interstate carriers and emails exchanged between the trio and their suppliers, the agent reported.

Then they raided the warehouse in May 2021.

As Pinches describes it:

"Specifically, law enforcement seized around 7,260 transceivers, which bore a total MSRP of around $13,774,576. Law enforcement also seized around 15 switches, which bore a total MSRP of around $241,000.

"Law enforcement also discovered a number of purported Cisco power supply devices to which counterfeit labels bearing Cisco trademarks were affixed."

According to Cisco, it was one of the largest volumes of counterfeit transceivers ever seized in the United States -- and the highest ever in terms of value.

U.S. District Judge Georgette Castner, who accepted the pleas, scheduled Ozturan for sentencing on Dec. 13, Demir for sentencing on Dec. 14 and Karaman on Jan. 4, Sellinger said.

Sellinger credited special agents of Homeland Security Investigations' Newark office and the Northeast Field Office of the U.S. Department of Defense Office of Inspector General's Defense Criminal Investigative Service with the investigation leading to the pleas, secured by Andrew M. Trombly, chief of his General Crimes Unit, and Assistant U.S. Attorney Samantha C. Fasanello of Sellinger's Cybercrime Unit in Newark.

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