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Authorities stop the giant digital ads fraud scheme – Axios



The Department of Justice announced on Tuesday that it has filed criminal charges against eight people in 13 indictments related to a digital advertising fraud scheme dubbed "3ve" worth tens of millions of dollars. The scheme, which included three separate operations, was discovered by Google and the fraud detection firm White Ops.

Why it matters: The operation was one of the largest and most sophisticated schemes ever discovered involving digital advertising fraud, in which advertisers are accused of seeing fake advertisements. The discovery required unprecedented collaboration between law enforcement and dozens of different private sector groups, many of which are competitors.

Our thought bubble: It is easier to make a joint effort between companies and the police when financial damage is being committed. Although this type of collaboration is also beginning to occur more frequently on the organic media side, capturing misinformation networks, there are fewer financial incentives to do so.

Be smart: Craig Silverman, of Per Buzzfeed, who unveiled the news: "With today's charges and the demolition of the 3ve systems, the Justice Department is sending a message that it now recognizes advertising fraud for what it is: a global criminal industry that is stealing billions with impunity and little fear of prosecution. "

The details: the The indictment was revealed in a federal court in Brooklyn. Eight men, five from Russia, one from Russia and Ukraine and two from Kazakhstan, were accused of criminal violations, such as electronic fraud, computer intrusion, aggravated identity theft and money laundering. Three of the eight have been arrested.

  • Some experts found that the new fraud scheme is reminiscent of the now infamous network of advertising fraud boats Methbot 2016 that emerged from Russia.

How does it work: The scammers executed false advertising networks, pushing ads to load on fabricated web pages and, in turn, charged advertising revenues. While this operation was different from Methbot's, it used part of the same infrastructure that helped implement that fraud scheme two years ago.

By the numbers: To give you an idea of ​​how complex and advanced the operation was:

  • Authorities say that "tens of millions" of advertising dollars were obtained illegally.
  • According to Google, the operation involved more than 10,000 counterfeit websites, more than 60,000 accounts that sold advertising inventory through more than one million compromised IP addresses, and processed more than 3 billion requests for daily offers.
  • The federal court in Brooklyn revealed seizure orders authorizing the FBI to take control of 31 Internet domains and obtain information from 89 computer servers that were part of the infrastructure of the botnets involved in the fraud scheme.

How they found it: White Ops and Google worked together to identify and investigate the crime advertising operation last year, which led to news on Tuesday from the police. White Ops says it was really a multisector effort.

"At the beginning of this collaboration, we were in a room run by the FBI with some of the largest Internet platforms, more than a dozen FBI agents and federal prosecutors in the DOJ … It was a turning point in history. of advertising fraud ".

– Hassan

The biggest picture: The digital advertising industry is extremely vulnerable to this type of fraud because there is a lot of money at stake ($ 273 billion worldwide, by eMarketer), and there is very little regulation or supervision of transactions.

  • To make things more difficult, online criminals can operate well beyond their physical jurisdictions, which means that international law enforcement agencies are generally required to work together to identify and dismantle such operations.

Whats Next: The industry, led in part by Google, the dominant player in the global digital advertising business, has tried to regulate itself to combat the problem.

  • But while these measures have been widely adopted on the publisher's side, they are still far from fully implemented on the side of the advertising agency, and the scammers have become more sophisticated about how to beat the system and evade detection.

Bottom line: It was assumed that digital advertising would bring more transparency to the advertising sector, but its increasingly automated nature has made it more susceptible to fraud. The lack of oversight makes fraud schemes often difficult to detect until it is too late. Industry collaboration as a form of self-regulation will be key to maintaining confidence in the digital market.


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