Authorities End the Digital Advertising Fraud Scheme – Axios


The Justice Ministry announced Tuesday that it had initiated criminal proceedings against eight people out of 13 indictments related to a digital advertising fraud ploy dubbed "3ve" worth tens of millions of dollars. dollars. The system, which included three separate operations, was discovered by Google and the White Ops fraud detection company.

Why it's important: This operation was one of the largest and most sophisticated ever in the field of digital advertising fraud. Advertisers are accused of viewing fake advertisements. This discovery required unprecedented collaboration between law enforcement agencies and dozens of private sector groups, many of which were competitors.

Our thought bubble: It is easier to have such a joint effort between companies and law enforcement when financial harm is committed. Although this type of collaboration also begins to happen more often on the organic media side, by catching botnets from misinformation, there are fewer financial incentives for this.

Be smart: Craig Silverman, of Buzzfeed, explained the following: "With the charges of today and the dismantling of 3ve systems, the Department of Justice sends the message that it now recognizes fraud. for what it is: a global criminal industry stealing billions with impunity and little fear of prosecution. "

The details: the The indictment was unsealed in federal court in Brooklyn. Eight men – five from Russia, one from Russia and Ukraine and two from Kazakhstan – have been charged with criminal offenses, including wire fraud, computer intrusion, theft of property. aggravated identity and money laundering. Three of the eight were arrested.

  • Some experts have found that the new fraud system is reminiscent of the now infamous Methbot ad fraud botnet 2016 from Russia.

How it works: Fraudsters have exploited fake ad networks, pushing ads to load on manufactured web pages and, in turn, taking advantage of ad revenue. Although this operation differs from the one against Methbot, it used part of the same infrastructure that allowed this fraud scheme to be applied two years ago.

In numbers: To give you an idea of ​​the complexity and the progress of the operation:

  • According to officials, "tens of millions" of advertising dollars were illegally obtained.
  • According to Google, the transaction involved more than 10,000 counterfeit websites, more than 60,000 accounts selling an ad inventory via more than one million compromised IP addresses, and processed more than 3 billion daily auction requests.
  • The federal court in Brooklyn has disclosed seizure warrants authorizing the FBI to take control of 31 Internet domains and to take out information on 89 servers that were all part of the infrastructure botnets involved in the fraud scheme .

How they found it: White Ops and Google collaborated to identify and investigate the criminal operation last year, which led to police news on Tuesday. White Ops says it was really a cross-sectoral effort.

"We were in a room at the beginning of this FBI-led collaboration with some of the largest platforms on the Internet, plus a dozen FBI agents and federal DOJ prosecutors … C & # 39; was a rather historic turning point in the history of advertising fraud. "

– Hassan

The biggest picture: The digital advertising industry is extremely vulnerable to this type of fraud because the sums involved are considerable ($ 273 billion globally, by eMarketer) and the regulation or monitoring of transactions is very limited.

  • To make things more difficult, cyber criminals can work well beyond their material jurisdictions, which means that it is usually necessary for international law enforcement agencies to work together to identify and dismantle such operations.

And after: The industry, led in part by Google, the dominant player in the digital digital advertising sector, has attempted to self-regulate to combat this problem.

  • But while these measures have been widely adopted by publishers, they are still far from being fully implemented by advertising agencies, and fraudsters have become more sophisticated about how to defeat the system while avoiding detection. .

Bottom line: Digital advertising was supposed to bring more transparency to the advertising industry, but its increasingly automated nature made it more vulnerable to fraud. A lack of surveillance often makes it difficult to detect fraud before it is too late. Industry collaboration as a form of self-regulation will be essential to maintain confidence in the digital marketplace.


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