Aleksandr Zhukov convicted of phony digital advertising scheme
Aleksandr Zhukov, a Russian national who boasted that he was the “king of fraud,” was convicted by a jury in Brooklyn Federal Court of scamming some of the biggest names in the communication business to the tune of more than $7 million.
The charges arose from Zhukov’s sophisticated scheme to
defraud brands, ad platforms and others in the U.S. digital advertising
industry. The verdict followed a three-week trial before United States District
Judge Eric R. Komitee.
In general, digital advertising revenue is based on how many
users click or view the ads on websites. But, as proven at trial, Zhukov used
computer programming and his own infrastructure to exploit the digital
advertising industry through fraud, according to the U.S. Attorney’s Office.
Zhukov and his co-conspirators told others that they ran
legitimate companies that delivered advertisements to internet users accessing
real internet webpages. In fact, Zhukov and his co-conspirators faked both the
users and the webpages: they programmed computers they controlled to load
advertisements on fabricated webpages, via an automated program, in order to
fraudulently obtain digital advertising revenue.
The victims included The New York Times, the New York Post,
Comcast, Nestle Purina, the Texas Scottish Rite Hospital for Children and Time
Warner Cable.
The evidence at trial established that between September
2014 and December 2016, Zhukov carried out his scheme through a purported
advertising network called Media Methane. Media Methane had business
arrangements with other advertising networks in which it received payments in
return for placing advertising placeholders on websites.
Rather than place these ad tags on real publishers’
websites, however, Media Methane rented more than 2,000 computer servers housed
in commercial datacenters in Dallas and Amsterdam and used those datacenter
servers to load ads on fabricated websites, “spoofing” more than 6,000 domains.
Zhukov leased more than 650,000 IP addresses, assigned multiple IP addresses to
each datacenter server, and then fraudulently registered those IP addresses in
the names of U.S. companies like Comcast and Time Warner Cable to make it
appear that the datacenter servers were residential computers belonging to
American internet users.
Zhukov was arrested in Bulgaria in November 2018 and
extradited to the United States in January 2019. On Friday, he was convicted of
four counts of wire fraud conspiracy, wire fraud, money laundering conspiracy,
and money laundering.
“Today, after evaluating the evidence and wading through the
complexities of digital advertising on the internet, the jury recognized the
defendant for who he is — a fraudster who used computer code to steal millions
from U.S. companies,” said Acting U.S. Attorney for the Eastern District of New
York Mark Lesko.
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