Two Kazakh Cybercriminals Plead Guilty in Global Digital Advertising Fraud Involving Tens Of Million

Two Kazakh Cybercriminals Plead Guilty in Global Digital Advertising Fraud Involving Tens Of Millions of Dollars in Losses

Leader of Scheme Will Forfeit Online Domains and More Than Eight Million Dollars Seized From Swiss Bank Accounts


Sergey Ovsyannikov and Yevgeniy Timchenko, citizens of the Republic of Kazakhstan, pleaded guilty yesterday and today, respectively, in federal court in Brooklyn to conspiring to commit wire fraud and related charges, for their involvement in a widespread digital advertising fraud. Ovsyannikov was arrested in October 2018 in Malaysia and extradited to the United States in March 2019. Timchenko was arrested in November 2018 in Estonia and extradited to the United States in February 2019. Both plea proceedings took place before United States Magistrate Judge Steven M. Gold. When sentenced, Ovsyannikov faces up to 42 years in prison, and Timchenko faces up to 40 years in prison.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty pleas.

Background on Digital Advertising

The internet is, in large part, freely available to users worldwide because it runs on digital advertising, where website owners display advertisements on their sites and are compensated by intermediaries representing businesses that advertise goods and services to human customers. In general, digital advertising revenue is based on how many users click, or view, the advertisements on those websites. As alleged in court filings, the defendants in this case represented that they ran legitimate companies that delivered advertisements to human internet users, who accessed real internet webpages. In fact, the defendants faked both the users and the webpages they programmed computers they controlled to load advertisements on fabricated webpages, via an automated program, and fraudulently obtained digital advertising revenue.

The Botnet-Based Criminal Scheme (“3ve.2 Template A”)

Between December 2015 and October 2018, Ovsyannikov and Timchenko were involved in operating a purported advertising network and carried out a digital advertising fraud scheme, referred to in the advertising industry as “3ve.2 Template A.” In this scheme, the defendants used a global “botnet”¾ a network of malware-infected computers operated without the true owner’s knowledge or consent to perpetrate their fraud. The defendants developed an intricate infrastructure of command-and-control servers to direct and monitor the infected computers, and to detect whether a particular infected computer had been flagged by cybersecurity companies as being associated with fraud. By using this infrastructure, the defendants accessed more than 1.7 million infected computers belonging to individuals and businesses in the United States and elsewhere, and used hidden browsers on those infected computers to download fabricated webpages and load advertisements onto those fabricated webpages. Meanwhile, the owners of the infected computers were unaware that this process was running in the background on their computers. As a result of this scheme, the defendants falsified billions of advertisement views and caused businesses to pay more than $29 million for advertisements that were never actually viewed by human internet users.

Read more: https://www.justice.gov/usao-edny/pr/two-kazakh-cybercriminals-plead-guilty-global-digital-advertising-fraud-involving-tens