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Ad Fraud FBI Technology

FBI indicts eight people in first major ad fraud case handed over to feds


By Charlotte McEleny, Asia Editor

November 28, 2018 | 4 min read

The United States Department of Justice has announced that it has taken action to pull down two major ad fraud rings, unveiling a 13-count indictment to charge criminal violations.


FBI issues indictment for ad fraud criminals

The announcement said the indictments charge Aleksandr Zhukov, Boris Timokhin, Mikhail Andreev, Denis Avdeev, Dmitry Novikov, Sergey Ovsyannikov, Aleksandr Isaev and Yevgeniy Timchenko with criminal violations for being involved in the ad fraud, now called 3ve.

The charges come after an industry task force, the workings of which has been detailed by Buzzfeed, handed over the details of what they started to suspect was a major ad fraud operation. Consisting of Google, Whiteops and other industry players, such as The TradeDesk and Oath, alongside the feds, the group then ran a covert operation that tracked and gathered evidence for well over a year and has now resulted in the dismantling of the fraud network.

The court in Brooklyn yesterday also issued seizure warrants that allowed the FBI to take control of 31 internet domains, and search warrants authorizing the FBI to take information from 89 computer servers. According to the release, these warrants were necessary to take down the infrastructure that was allowing the botnets to carry out the fraudulent activity. The FBI and the working group partners redirected the internet traffic going to the domains, which the FBI says is called “sinkholing”, to stop it.

According to some of the companies involved, this case is over twice the size of Methbot, the Russion ad fraud case detected by Whiteops in 2016. Estimates to how much ad fraud is costing the industry varies, but in 2017 the cost was placed at $16.4bn for that year alone.

The industry has come together to look at the issue, with organisations such as the Trustworthy Action Group (TAG) being set up and the IAB launching its tech response ads.txt which hopes to tackle part of the issue.

The FBI specifically thanked the private sector and businesses for cooperating on the case thus far, with the Buzzfeed story revealing that companies such as Google had to keep spending advertiser money on the fraudulent activity and then reimburse brands out of its own pocket, in order to keep gathering evidence without alerting the case to the fraudsters.

“As alleged, these individuals built complex, fraudulent digital advertising infrastructure for the express purpose of misleading and defrauding companies who believed they were acting in good faith, and costing them millions of dollars. This kind of exploitation undermines confidence in the system, on the part of both companies and their customers,” stated FBI assistant director-in-charge William F. Sweeney, Jr. “Thanks to the hard work of our legal attachés and law enforcement partners overseas, with the cooperation of our international and U.S.-based private sector partners, the defendants will face justice for their alleged crimes.”

Likewise, World Federation of Advertisers CEO Stephan Loerke, added, “It’s hugely encouraging to see the industry unite with international law enforcement to dismantle this sophisticated ad fraud ring. We have to change the risk/reward profile of ad fraud and this is a positive step in that direction."

The government is also seizing funds and assets connected to the case, such as bank accounts in Switzerland.

Ad Fraud FBI Technology

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