‘King of fraud’ convicted in Brooklyn court of phony digital advertising scheme

May 31, 2021 Brooklyn Eagle Staff

Former Acting U.S. Attorney Mark Lesko. Photo courtesy of Department of Justice

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On Friday, 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.