Late last year, the FBI filed charges after its largest digital ad fraud investigation. Here’s what you should know.
Steve Guenther, Vice President, Digital Auditing
In November, the digital advertising world was rocked with news that the FBI had taken down a massive ad fraud operation when the Department of Justice unsealed indictments against eight individuals for a host of criminal activities. Dubbed 3ve—pronounced “eve”—the operation received extensive media coverage due to the scale of the fraud and the amount of money lost. Several news organizations wrote excellent, in-depth articles about 3ve:
- BuzzFeed: Eight People Are Facing Charges as a Result of The FBI’s Biggest-Ever Ad Fraud Investigation
- AdExchanger: Why the DOJ Finally Cracked Down on Ad Fraud
- Engadget: FBI and Google Dismantle Multi-Million Dollar Ad Fraud Scheme
Here are some of the highlights from the news reports and investigation:
What is 3ve?
3ve is a massive, coordinated ad fraud scheme that impacted the global advertising industry and led to a criminal investigation.
According to BuzzFeed, “At its peak, 3ve involved about 1.7 million PCs infected with malware, an array of servers that could generate mountains of fake traffic with bots, roughly 5,000 counterfeit websites created to impersonate legitimate web publishers and over 60,000 accounts with digital advertising companies to help fraudsters receive ad placements and get paid. The indictment also alleges the fraudsters created their own advertising network to help facilitate the fraud.”
This was a sophisticated attack on the digital ad industry to steal ad dollars. It started out as a small botnet programmed to visit specific websites and to generate page views and ad impressions. But it quickly grew and began evading efforts to filter and contain its traffic. Its three-pronged approach using malware to infect PCs, fake websites masquerading as legitimate publishers and bots to mimic human behavior made it difficult to combat. A coordinated industry effort together with the FBI gathered the needed evidence before shutting the operation down.
Who was behind 3ve?
The Department of Justice said there were eight men behind the scheme: Aleksandr Zhukov, Boris Timokhin, Mikhail Andreev, Denis Avdeev, Dmitry Novikov, Sergey Ovsyannikov, Aleksandr Isaev, and Yevgeniy Timchenko.
What were the crimes?
Charges against the accused include wire fraud, computer intrusion, aggravated identify theft and money laundering.
How much money was lost?
It is estimated that tens of millions of dollars were stolen as part of the operation.
Who was impacted?
The impact of 3ve may not never be known. Consumers’ devices were infected with malware, advertisers were duped by the fake sites and legitimate publishers lost money to the fake sites mimicking legitimate sites.
What happens next?
The digital advertising industry is facing continued investigation and oversight by law enforcement and lawmakers. The FBI has an open investigation into media buying practices of ad agencies and the Senate Intelligence Committee has called on the Federal Trade Commission to investigate ad fraud.
What can the industry do to police itself and prevent further attacks?
Digital ad fraud persists because fake websites and fake traffic are engineered to pass as legitimate. Publishers purchasing, or sourcing, traffic is a critical issue that contributes to the fake traffic problem and—until now—has been largely unaddressed at the publisher level.
AAM Quality Certification tackles these two issues by separating premium publishers from less trustworthy sources and focusing on publishers’ business processes around sourcing traffic. To achieve certification, publishers must document and demonstrate their business practices so that auditors can gain a clear understanding of their digital media operations. Publishers also undergo continuous monitoring of the quantity and quality of their website traffic as part of AAM’s holistic audit approach.
You can learn more about how sourced traffic opens up publishers and buyers to fraud in our whitepaper, 3 Truths That Help Confront the Digital Ad Fraud Crisis.