A Turkish man who worked as a lobbyist for President Recep Tayyip Erdoğan in the US has been charged in a criminal complaint with conspiracy to commit letter and wire fraud, followed by another charge recently brought against his business partner for the same crime.
Israfil Demir, former vice chairman of the Turkish-American National Steering Committee (TASC), a front organization set up under the guidance and support of the Erdoğan government to lobby the US government, was accused last year of involvement in a multi-million dollar -Dollar conspiracy accused of trafficking counterfeit computer network equipment from China to the US.
His associate Musa Karaman, also Turkish, who worked with Demir in running the program, was charged with the same crime on May 20, 2022.
Demir is close to the Erdoğan government and appeared in pictures alongside Turkey’s Foreign Minister Mevlüt Çavuşoğlu and Erdoğan’s spokesman Ibrahim Kalin. He was chairman of the youth sections of Turkey’s ruling Justice and Development Party (AKP) in the US and campaigned for and lobbied for Erdoğan and his party in the Turkish diaspora in the US.
Between January 2019 and February 2020, he was also the head of the youth department of the Islamist business group of the Association of Independent Industrialists and Businessmen (MÜSİAD).
Criminal complaint against Turkish owner of New Jersey-based company:
According to the complaint, filed by a special agent with the US Department of Homeland Security, Demir, Karaman and an unnamed third party sold counterfeit networking equipment appearing to be manufactured by Cisco Systems Inc., a large US technology conglomerate.
Despite a warning from US Customs and repeated cease and desist orders from Cisco, the gang continued to import counterfeit products from China and sell them through Amazon Marketplace and the company’s website https://www.techdatamarket.com/, which is now offline.
Demir, using the alias David, founded and operated numerous business entities including MIS Enterprise LLC, a company incorporated in New Jersey on October 15, 2014 to sell electronic goods including counterfeit Cisco equipment that he and his Employees had procured from various illegal suppliers based in China.
According to registration documents, Karaman was President and Demir General Manager of MIS Enterprise. Other Turks linked to the company include environmental health safety engineer Murat Şahinler, e-commerce specialist Gülşen Satır and purchasing agent Efe Arslangiray.
In May 2021, federal agents executed a search warrant at a Woodland Park, New Jersey, warehouse used by Karaman and his co-conspirators as their corporate headquarters and discovered thousands of counterfeit Cisco devices, including 7,260 counterfeit Cisco transceivers with a manufacturer’s suggested retail price of approximately $13.77 million.
According to Cisco, this was one of the largest quantities of counterfeit Cisco transceivers ever seized in the United States, and the total value of counterfeit Cisco transceivers seized was unprecedented.
Karaman and his associates had continued to trade in counterfeit products even though U.S. Customs and Border Protection had seized approximately $3.8 million worth of counterfeit Cisco products contained in over 20 shipments from suppliers in China between September 2017 and September 2017 May 2021 and notifications sent to Company.
To avoid detection at customs, Karaman used multiple fake names and multiple delivery locations. In one instance, he used his wife’s name as the recipient of an import from China. The main storage location for the goods was the warehouse in New Jersey.
Demir was charged in a criminal complaint on May 26, 2021 with conspiracy to commit mail and wire fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of either $250,000 or double the gain or loss from the offense , whichever is larger.
Karaman was arrested on May 20, 2022 and released on $300,000 unsecured bail. An investigation by Nordic Monitor revealed that in 2020, Karaman applied for a green card through an attorney, asking to change his student visa status from F-1 to permanent resident. He showed his job at MIS Enterprise LLC to support his applications. His salary was listed on the filing as $46,280. It is not clear what happened to his application or whether his immigration status would be affected by the complaint filed against him.
The gang also set up a Turkey-based company to sell goods to the company they own in the US:
The company also has business relations in Turkey and imported a number of products from an Istanbul-based company, which Demir and his associates run under the name Technocity Danişmanlik İthalat İhracat Ticaret ve Sanayi Limited Şirketi, an e-commerce company owned by Demir. Karaman and a person named Sadri Özturan. Technocity was founded in February 2019 with a capital of 300,000 Turkish Lira. All partners have given their addresses in New Jersey.
The criminal complaint against him and his associates is very detailed, with officers from the Homeland Security Investigations, Department of Defense, US Customs and Border Protection and the Port of New York/Newark charting our illegal activities. Email and WhatsApp communications were intercepted and included in the complaint to support the charges.
The Google email account used by Demir, which was checked by investigators after he received a search warrant, showed that Demir frequently placed orders and inquired about prices on counterfeit products from suppliers in China.
Several emails also showed a complaint from a customer in the US who had bought a Demir Cisco product and found it to be counterfeit. In response, Demir claimed the product was genuine and even sent a fake invoice with the Cisco logo to convince the buyer. He also emailed his supplier in China to be careful and make changes to make the fake products appear more genuine. Bank records revealed that Demir and his associates transferred $1.2 million to purchase counterfeit products made in China.
WhatsApp group communication between Demir, Karaman and a third person revealed that they knew they were in trouble when the shipments were being assessed by US Customs. But Demir pushed to keep going because he said, “All the money we make comes from Cisco.” In the same group chat, Demir and Karaman discuss how to overcome issues on Amazon Marketplace when a Cisco listing is removed after a buyer complaint became. They created a fake Cisco invoice from an authorized Cisco distributor and sent it to Amazon to relist the product.
The Pentagon is also involved in the investigation, as Cisco systems are used in a variety of US government, military and other critical infrastructure applications. Robert S. Pinches, the special agent for Homeland Security Investigations who filed the complaint, said that “Sensitive and critical functions performed by government and public and private entities depend on the performance of high-quality networking products. These functions will be compromised by low-quality counterfeits.”
MIS Enterprise was not authorized to sell Cisco products; Still, the company owners set up an account with a major CISCO dealership in Pennsylvania to appear legitimate, even though they never ordered CISCO equipment from the dealership. Instead, they turned to five suppliers in China and Hong Kong to import counterfeit devices and sell them in the US as genuine products.
US investigators had CISCO verify the counterfeits by sending in samples of confiscated products owned and imported by MIS Enterprise. In August 2020, investigators also ordered a CISCO product from the company’s Amazon store to further verify the criminal activities. The counterfeit CISCO product was advertised at $1,455.52 when a real suggested retail price was $12,793.30. The product was analyzed by CISCO and also found to be counterfeit.