King of Ad Fraud to reign in a US prison for years

Aleksandr Zhukov, a Russian citizen and self-proclaimed “king of fraud,” received a 10-year prison sentence this week for carrying out a $ 7 million digital ad fraud scheme.

Zhukov was convicted in May on multiple counts of fraud and money laundering. He was arrested in Bulgaria in 2018 and extradited to the United States the following year.

“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 victimized thousands of companies across the United States,” said Breon Peace, US Attorney for the Eastern District of New York, in a declaration.

Beginning in 2014, according to court documents, Zhukov and his co-conspirators launched a fraudulent advertising business called Media Methane that took payment from ad networks to serve online advertisements to Internet users.

“However, instead of placing these ads on actual publisher web pages as promised, Zhukov and others rented thousands of computer servers located in commercial data centers in the United States and elsewhere, and used those center computer servers. of data to simulate humans viewing ads on web pages, “the US government’s indictment. [PDF] He says.

Zhukov and his associates, seven people who are being prosecuted separately, are said to have rented more than 2,000 servers in data centers in Dallas, Texas, and Amsterdam, the Netherlands. Media Methane allegedly offered ad space on fabricated web pages to ad buyers who would bid on the space. But the company showed those ads to an audience of bots.

The bots, computer programs, are said to have been designed to interact with fake web pages in order to simulate realistic mouse movements and web page interactions, such as watching videos on social media sites. They were trained to bypass CAPTCHA puzzles, accept cookies, and pretend to be logged into social media services. Its code, the indictment claims, managed to bypass fraud detection software used by various US cybersecurity companies.

To make the fraud more credible, Zhukov is said to have leased more than 765,000 IP addresses to IP address leasing companies, which he then assigned to servers in the data center and entered into a global IP address registry. By falsely registering IP addresses in the names of companies like Comcast and Time Warner Cable, Zhukov made the addresses appear to belong to US residential Internet subscribers of those services. Some 6,000 domains are said to have been spoofed in this way.

Businesses victimized by this scheme, which are said to have made more than $ 7 million, include The New York Times, The New York Post, Comcast, Nestlé Purina, the Texas Scottish Rite Hospital for Children, and Time Warner Cable.

According to the government, Zhukov hired several developers to help him carry out his fraud scheme and referred to himself as the “king of fraud.” The feds claim that he personally received more than $ 4.8 million through the ad fraud scheme, although Zhukov’s attorneys are currently trying to convince the judge that only about $ 1 million should be subject to forfeiture.

Criminal prosecutions for advertising fraud have been relatively rare. Among the most notable cases are a case of click fraud in 2011 against six Estonian citizens and one Russian citizen, another since 2017and a case of medical ad fraud since 2019. ®

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