Cyber-Ring That Bilked Millions From Businesses Busted: Feds

DOWNTOWN BROOKLYN – Federal investigators revealed this week how they took down two international cyber-criminal rings that defrauded businesses out of tens of millions of dollars in advertising money. The eight men who led the schemes were indicted in Brooklyn court on Tuesday, though five of them remain "at large" overseas.

The men – from Russia, Ukraine and Kazakhstan – swindled businesses out of millions in exchange for what they thought were digital advertisements online. But, the indictment claims, the men were faking both the webpages where they put the ads and the "users" who let them collect money every time it was "viewed."

"...The defendants in this case used sophisticated computer programming and infrastructure around the world to exploit the digital advertising industry through fraud," said Richard Donoghue, the United States attorney for the Eastern District of New York. "This case sends a powerful message that this office, together with our law enforcement partners, will use all our available resources to target and dismantle these costly schemes and bring their perpetrators to justice, wherever they are."

Donaghue announced the indictment, and over 100 search and seizure warrants with the case, with New York City Police Commissioner James P. O'Neill and William F. Sweeney Jr., assistant director-in-charge with the FBI's New York Field Office.

The 33-page indictment alleges that in one of the cyber rings, five of the men rented out 1,900 computer servers at datacenters and created 650,000 IP addresses to carry out a scheme from 2014 to 2015. They collected $7 million from businesses and faked billions of ad views by using programming that simulated "real human internet users" browsing, scrolling and signing into Facebook on the fake webpages, court records show.

In the other scheme, from the end of 2015 until just last month, a few of the men tapped into the computers of 1.7 million people and businesses across and outside of the United States, using hidden browsers to download the fake webpages while the real computer's owner was completely unaware. With this method, businesses paid the men a total of $29 million for ads that were never actually viewed by internet users, the indictment claims.

The FBI started its "botnet takedown" of both cyber rings after one of the men, Sergey Ovsyannikov, was arrested in Malaysia in October.

The feds, with the help of private businesses, redirected the internet traffic used in the scheme, executed search warrants at 11 U.S. server providers and seized international bank accounts in Switzerland and other countries the men were using.

They even found an additional cyber-crime ring during their investigation that was using servers and computers in Germany and the U.S, officials said.

So far, three of the men have been arrested overseas – 30-year-old Ovsyannikov in Malaysia, 38-year-old Aleksandr Zhukov in Bulgaria and 39-year-old Boris Timchenko in Estonia. The three men are awaiting extradition to the United States, officials said.

The remaining five men – Mikhail Andreev, Denis Avdeev, Dmitry Novikov, Aleksandr Isaev and Yevgeniy Timchenko – are still "at large," officials said.

“This kind of exploitation undermines confidence in the system, on the part of both companies and their customers,” Sweeney said. “Thanks to the hard work of our legal attaches 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.”

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