A Turkish man who has been working as a lobbyist for President Recep Tayyip Erdoğan in the US was charged in a criminal complaint for conspiracy to commit mail and wire fraud, followed by another charge recently leveled against his business associate for the same crime.
Israfil Demir, former deputy chair of the Turkish American National Steering Committee (TASC), a front organization established under the guidance and support of the Erdoğan government to influence the US government, was charged last year with participating in a multimillion-dollar conspiracy to traffic counterfeit computer networking devices from China to the US.
His associate Musa Karaman, also Turk who worked with Demir in running the scheme, was charged with the same crime on May 20, 2022.
Demir is close to the Erdoğan government and has appeared in pictures next to Turkish Foreign Minister Mevlüt Çavuşoğlu and Ibrahim Kalin, Erdoğan’s spokesperson. He had been the leader of the youth branches of Turkey’s ruling Justice and Development Party (AKP) in the US and ran an election campaign for Erdoğan and his party among the Turkish diaspora in the US as well as lobbying for him.
Between January 2019 and February 2020, he was also the head of Islamist business group the Independent Industrialists and Businessmen’s Association (MÜSİAD) youth branch.
Criminal complaint filed against Turkish owner of New Jersey-based firm:karaman.complaint_0
According to the complaint filed by a US Department of Homeland Security special agent, Demir, Karaman and an unnamed third person were selling counterfeit networking devices that were made appear to have been manufactured by Cisco Systems Inc., a major 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, who used the fake name of David, formed and operated numerous business entities including MIS Enterprise LLC, a company that was set up in New Jersey on October 15, 2014, to sell electronic goods including counterfeit Cisco devices that he and his associates procured from various illicit suppliers based in China.
According to registry records, Karaman was president and Demir was general manager of MIS Enterprise. Other Turks associated with the company are Environmental Health Safety Engineer Murat Şahinler, Ecommerce Specialist Gülşen Satır and purchasing representative 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 business headquarters and discovered thousands of counterfeit Cisco devices, including 7,260 counterfeit Cisco transceivers with a total manufacturer’s suggested retail price of approximately $13.77 million.
According to Cisco, this was one of the largest volumes of counterfeit Cisco transceivers ever seized in the US, and the total value of the seized counterfeit Cisco transceivers was unprecedented.
Karaman and his associates had continued to trade in counterfeit products despite the fact that US Customs and Border Protection seized approximately $3.8 million worth of counterfeit Cisco products contained in over 20 shipments sent by suppliers in China between September 2017 and May 2021 and sent notices to the company.
In order to avoid detection at Customs, Karaman used multiple fake names and various delivery locations. In one instance, he used his wife’s name as the recipient of an import from China. The main location for storing 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 penalty of 20 years in prison and a maximum fine of either $250,000 or twice the gain or loss from the offense, whichever is greater.
Karaman was arrested on May 20, 2022 and released on a $300,000 unsecured bond. A Nordic Monitor investigation showed that in 2020 Karaman filed an application for a green card through an attorney and asked to change his student visa status from F-1 to permanent residency. He showed his job at MIS Enterprise LLC to support his applications. His salary was listed at $46,280 in the filing. It is not clear what happened to his application or whether his immigration status would be impacted by the complaint filed against him.
The gang also established a Turkish-based firm to sell goods to the company they own in the US:Technocity_firm_Turkey
The company also has business ties to Turkey and imported a number of products from an Istanbul-based company Demir and his associates established under the name of Technocity Danişmanlik İthalat İhracat Ticaret ve Sanayi Limited Şirketi, an e-commerce firm owned by Demir, Karaman and a person named Sadri Özturan. Technocity was established in February 2019 with capital of 300,000 Turkish lira. All partners listed their addresses in New Jersey.
The criminal complaint against him and his associates is very detailed, with officers from Homeland Security Investigations, the Department of Defense , US Customs and Border Protection and the Port of New York/Newark mapping our their illegal activities. Email and WhatsApp communications were intercepted and included in the complaint to support the charges.
The Google email account used by Demir and reviewed by investigators after securing a search warrant showed that Demir was frequently placing orders and inquiring about prices for counterfeit products with suppliers in China.
Several emails also showed a complaint from a customer in the US who bought a Cisco product from Demir and realized it was counterfeit. In response Demir claimed the product was genuine and even sent a forged invoice bearing the Cisco logo to convince the buyer. He also emailed his supplier in China to be careful and make changes to make the counterfeit products appear more genuine. The banking records revealed that Demir and his associates had wired $1.2 million to buy counterfeit products from China.
The WhatsApp group communications among Demir, Karaman and a third person revealed that they knew they were in trouble when the shipments were sized by the US Customs. Yet Demir was pushing to continue because he said “all the money that we make comes from Cisco.” In the same group chat Demir and Karaman are seen discussing how to overcome problems at Amazon Marketplace when a Cisco listing was removed after a buyer’s complaint. They generated a fake Cisco invoice from an authorized Cisco distributor and sent it to Amazon to re-list the product.
The Pentagon is also involved in the investigation because Cisco systems are used in a number of applications by the US government, military and other critical infrastructure. Robert S. Pinches, the special agent with Homeland Security Investigations who filed the complaint, said that “sensitive and important functions performed by the government, as well as both public and private-sector entities, rely on the performance of high-quality networking products. These functions are endangered by lower quality counterfeits.”
MIS Enterprise was not authorized to sell Cisco products; yet the company owners set up an account with a major CISCO distributor in Pennsylvania to make appear that they were legitimate although they never ordered any CISCO equipment from the distributor. 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 samples from seized products owned and imported by MIS Enterprise. In August 2020 investigators also ordered a CISCO product from the company’s Amazon storefront to further verify the criminal activity. The fake CISCO product was advertised for $1,455.52 when a genuine suggested retail price was $12,793.30. The product was analyzed by CISCO and found to be counterfeit as well.