Jail term for digital ads fraudster

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United States District Judge Eric R. Komitee has sentenced Aleksandr Zhukov to 10 years’ imprisonment for perpetrating a digital advertising fraud scheme through which the defendant and his co-conspirators stole more than $7 million (€6.13m) from US advertisers, publishers, platforms, and others in the US digital advertising industry.

The federal courthouse in Brooklyn also ordered Zhukov to pay $3,827,493 in forfeiture. Zhukov, a Russian national who was arrested in Bulgaria in 2018, was extradited to the United States in 2019, and was convicted following a jury trial in May 2021 of wire fraud conspiracy, wire fraud, money laundering conspiracy, and money laundering.

“Sitting at his computer keyboard in Bulgaria and Russia, Zhukov boldly devised and carried out an elaborate multi-million-dollar fraud against the digital advertising industry, and victimised thousands of companies across the United States,” stated Breona Peace, United States Attorney for the Eastern District of New York. “Today’s sentence holds the defendant accountable for his deception and outright theft of more than $7 million, and sends a powerful message to cyber criminals around the world that there is no escape from the international reach of law enforcement.”

Between September 2014 and December 2016, Zhukov operated a purported advertising network—Media Methane—and carried out a digital advertising fraud scheme that came to be known as ‘Methbot’. Media Methane had business arrangements with other advertising networks whereby it received payment in return for placing advertisements—primarily video advertisements—on websites. Rather than place advertisements on real publishers’ webpages where human internet users would see them, Zhukov rented more than 2,000 computer servers housed in commercial datacenters in Dallas, Texas, Amsterdam and the Netherlands, and programmed the datacenter computer servers (the ‘bots’) to simulate humans viewing ads on webpages. Zhukov and his co-conspirators programmed the bots to load real ads on blank webpages while falsely representing that the ads were loading on real webpages, ‘spoofing’ the domains of more than 6,000 publishers, including The New York Times, the New York Post, the New York Daily News, Newsday, and the Staten Island Advance.

To create the illusion that human internet users were viewing the advertisements loaded onto these spoofed webpages, Zhukov and his co-conspirators programmed the bots to appear and behave like human Internet users: falsely representing that they had screens and mouses, that they were running operating systems used for personal computers, and that they were running commercially available Internet browsers (such as Chrome, Internet Explorer, and Firefox), when they were not. Zhukov and his co-conspirators also programmed the bots to click around a screen a randomly determined number of times, simulate a mouse moving around and scrolling down a webpage, start and stop a video player midway, bypass captchas, accept cookies, and falsely appear to be signed into popular social media services such as Facebook, Twitter, and Google.

In addition, the defendant leased more than 765,000 Internet Protocol addresses, assigned multiple IP addresses to each datacenter server, and then fraudulently registered IP addresses in the names of major US internet providers. Zhukov entered the false usage and location information into IP databases that are widely relied upon in the industry to make it appear that the computers in question belonged to human internet users located in homes and businesses around the United States.

Zhukov recruited computer programmers and other employees to help him perpetrate the scheme and build the technical infrastructure required to create fraudulent ad traffic. He referred to these individuals as ‘my developers’, and referred to himself as the ‘king of fraud’.

The victim companies collectively paid more than $7 million for ads that were never actually viewed by human Internet users and never actually displayed on real webpages.

Zhukov directed and transferred proceeds from the scheme to and through multiple personal and corporate bank accounts in Bulgaria, Russia, the United Kingdom, the Czech Republic, Latvia, and Cyprus. He kept 75 per cent of the scheme’s proceeds for himself and pocketed more than $4.8 million from the fraud.

“Justice has been served,” said Mike Zaneis CEO of the Trustworthy Accountability Group (TAG), an advertising industry initiative to fight criminal activity and strengthen brand safety in the digital advertising supply chain. “This lengthy sentence sends a powerful message to ad fraud criminals worldwide that the US government is making it a priority to find them, prosecute them, and send them to jail. We are deeply grateful for the leadership and collaboration of the US Department of Justice, US Attorney’s Office of the Eastern District of New York, Federal Bureau of Investigation, and New York Police Department in bringing Mr. Zhukov to justice. We also are also indebted to the TAG member companies who helped expose this fraud operation, shared their threat intelligence with their industry peers, and provided that critical information to law enforcement to assist with their investigations.”

TAG also released a letter that it sent to the US Attorney’s Office prior to sentencing that provided background on the impact of Zhukov’s crimes and encouraged the Court to “treat this case with the same gravity as past fraud cases and to issue a sentence that matches the severity of the crime.”

 


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