Login
At the outset of their federal criminal trial for hijacking vast swaths of Internet addresses for use in large-scale email spam campaigns, three current or former executives at online advertising firm Adconion Direct (now Amobee) have pleaded guilty to lesser misdemeanor charges of fraud and misrepresentation via email.
In October 2018, prosecutors in the Southern District of California named four Adconion employees — Jacob Bychak, Mark Manoogian, Petr Pacas, and Mohammed Abdul Qayyum — in a ten-count indictment (PDF) on felony charges of conspiracy, wire fraud, and electronic mail fraud.
The government alleged that between December 2010 and September 2014, the defendants engaged in a conspiracy to identify or pay to identify blocks of Internet Protocol (IP) addresses that were registered to others but which were otherwise inactive.
Prosecutors said the men also sent forged letters to an Internet hosting firm claiming they had been authorized by the registrants of the inactive IP addresses to use that space for their own purposes.
All four defendants pleaded not guilty when they were charged back in 2018, but this week Bychak, Manoogian and Qayyum each entered a plea deal.
“The defendants’ jobs with Adconion were to acquire fresh IP addresses and employ other measures to circumvent the spam filters,” reads a statement released today by the U.S. Attorney for the Southern District of California, which said the defendants would pay $100,000 in fines each and perform 100 hours of community service.
“To conceal Adconion’s ties to the stolen IP addresses and the spam sent from these IP addresses, the defendants used a host of DBAs, virtual addresses, and fake names provided by the company,” the statement continues. “While defendants touted ties to well-known name brands, the email marketing campaigns associated with the hijacked IP addresses included advertisements such as ‘BigBeautifulWomen,’ ‘iPhone4S Promos,’ and ‘LatinLove[Cost-per-Click].'”
None of the three plea agreements are currently available on PACER, the online federal court document clearinghouse. However, PACER does show that on June 7 — the same day the pleas were entered by the defendants — the government submitted to the court a superseding set of just two misdemeanor charges (PDF) of fraud in connection with email.
Another document filed in the case says the fourth defendant — Pacas — accepted a deferred prosecution deal, which includes a probationary period and a required $50,000 “donation” to a federal “crime victims fund.”
There are fewer than four billion so-called “Internet Protocol version 4” or IPv4 addresses available for use, but the vast majority of them have already been allocated. The global dearth of available IP addresses has turned them into a commodity wherein each IP can fetch between $15-$25 on the open market.
This has led to boom times for those engaged in the acquisition and sale of IP address blocks, but it has likewise emboldened those who specialize in absconding with and spamming from dormant IP address blocks without permission from the rightful owners.
In May, prosecutors published information about the source of some IP address ranges from which the Adconion employees allegedly spammed. For example, the government found the men leased some of their IP address ranges from a Dutch company that’s been tied to a scandal involving more than four million addresses siphoned from the African Network Information Centre (AFRINIC), the nonprofit responsible for overseeing IP address allocation for African organizations.
In 2019, AFRINIC fired a top employee after it emerged that in 2013 he quietly commandeered millions of IPs from defunct African entities or from those that were long ago acquired by other firms, and then conspired to sell an estimated $50 million worth of the IPs to marketers based outside Africa.
“Exhibit A” in a recent government court filing shows that in 2013 Adconion leased more than 65,000 IP addresses from Inspiring Networks, a Dutch network services company. In 2020, Inspiring Networks and its director Maikel Uerlings were named in a dogged, multi-part investigation by South African news outlet MyBroadband.co.za and researcher Ron Guilmette as one of two major beneficiaries of the four million IP addresses looted from AFRINIC by its former employee.
Exhibit A, from a May 2022 filing by U.S. federal prosecutors.
The address block in the above image — 196.246.0.0/16 — was reportedly later reclaimed by AFRINIC following an investigation. Inspiring Networks has not responded to requests for comment.
Prosecutors allege the Adconion employees also obtained hijacked IP address blocks from Daniel Dye, another man tied to this case who was charged separately. For many years, Dye was a system administrator for Optinrealbig, a Colorado company that relentlessly pimped all manner of junk email, from mortgage leads and adult-related services to counterfeit products and Viagra. In 2018, Dye pleaded guilty to violations of the CAN-SPAM Act.
Optinrealbig’s CEO was the spam king Scott Richter, who changed the name of the company to Media Breakaway after being successfully sued for spamming by AOL, Microsoft, MySpace, and the New York Attorney General Office, among others. In 2008, this author penned a column for The Washington Post detailing how Media Breakaway had hijacked tens of thousands of IP addresses from a defunct San Francisco company for use in its spamming operations.
The last-minute plea deals by the Adconion employees were reminiscent of another recent federal criminal prosecution for IP address sleight-of-hand. In November 2021, the CEO of South Carolina technology firm Micfo pleaded guilty just two days into his trial, admitting 20 counts of wire fraud in connection with an elaborate network of phony companies set up to obtain more than 700,000 IPs from the American Registry for Internet Numbers (ARIN) — AFRINIC’s counterpart in North America.
Adconion was acquired in June 2014 by Amobee, a Redwood City, Calif. online ad platform that has catered to some of the world’s biggest brands. Amobee’s parent firm — Singapore-based communications giant Singtel — bought Amobee for $321 million in March 2012.
But as Reuters reported in 2021, Amobee cost Singtel nearly twice as much in the last year alone — $589 million — in a “non-cash impairment charge” Singtel disclosed to investors. Marketing industry blog Digiday.com reported in February that Singtel was seeking to part ways with its ad tech subsidiary.
One final note about Amobee: In response to my 2019 story on the criminal charges against the Adconion executives, Amobee issued a statement saying “Amobee has fully cooperated with the government’s investigation of this 2017 matter which pertains to alleged activities that occurred years prior to Amobee’s acquisition of the company.”
Yet as the government’s indictment points out, the alleged hijacking activities took place up until September 2014, which was after Amobee’s acquisition of Adconion Direct in June 2014. Also, the IP address ranges that the Adconion executives were prosecuted for hijacking were all related to incidents in 2013 and 2014, which is hardly “years prior to Amobee’s acquisition of the company.”
Amobee has not yet responded to requests for comment.
Where would we be without our internet this year?
We’ve shopped, worked, studied and taught, job hunted, and cared for each other online this year in ways we haven’t before—not to mention entertained ourselves plenty too. As so many of us have faced challenges and outright adversity this year, it’s difficult to imagine what this year would have been like without the support of a reliable broadband internet connection. So much so, you can argue that it’s become a necessity.
For that, I’m thankful—and recognize that we have a long way to go before all of us can share in those same thanks. As I’ve mentioned in earlier blogs, fixed broadband internet access at home remains elusive for many. In the U.S. alone, one analysis shows that more than 150 million people do not use the internet at broadband speeds, which is practically half of the U.S. population.
A good question to ask here is what exactly constitutes “broadband?” The Federal Communications Commission (FCC) defines broadband speeds as 25 Megabits per second (Mbps) of download speed and 3 Mbps of upload speed. (Note that the FCC estimates only 21 million people in the U.S. are without broadband, a number widely considered to be low.)
Put in everyday terms, 25 Megabits per second of download speed is baseline figure that should provide a family of two to four people with enough capacity to engage in bandwidth-hungry activities like working from home, schooling online, or even receiving medical care through telemedicine, along with streaming to stay entertained and informed too.
As we look at that figure of 150 million underserved people, we see people who live in remote areas that simply aren’t wired for broadband yet, representing millions of rural residents and people living on tribal lands. Additionally, it also includes people in urban areas who potentially have access to a broadband connection, yet their income levels impact their ability to subscribe to it.
Obviously, a major hurdle in rolling out broadband nationwide is the 1.9 billion acres that makes up our country. The physical, technological, and financial efforts associated with building fixed broadband access across rural and remote terrain are substantial to say the least. Additionally, there are regulatory matters as well, like the rules that govern access to existing utility poles and conduits needed for broadband deployment.
Ultimately, we’re talking about connecting not just homes, but entire communities—people, businesses, libraries, granges, local government, and more. Getting them access to broadband isn’t just a commercial interest, it’s a matter of infrastructure as well. Just as water and electricity are utilities, we can argue that the internet, broadband internet, has long since evolved into a utility. The reasons are clear: education, economic growth, employment and even access to healthcare all stand to improve when broadband is available to a community, as has been seen in communities such as Chattanooga, Tennessee and in Delta County, Colorado. Thus it makes sense that connecting them has become a joint endeavor by the public and private sector.
Meanwhile, last summer, the lack of adequate broadband across Nebraska during the pandemic prompted the state’s governor and legislature to allocate pandemic relief funds and pass bills that would speed the deployment of broadband across the state. As reported by the Omaha World-Herald, one of Nebraska’s rural power district managers said of fixed broadband service, “It goes beyond economic development, it goes beyond watching Netflix, there’s some real business implications here.”
However, even in communities where broadband is physically available, pockets of low-speed connectivity exist as well. According to the Pew Research Center, only 53 percent of adults with an income under $30,000 had broadband access at home. For those with an income of between $30,000 and $100,000, that figure takes a major leap up to 81%. Instead, lower-income Americans turn to their smartphones for all their internet access. From the findings:
“As of early 2019, 26% of adults living in households earning less than $30,000 a year are “smartphone-dependent” internet users–meaning they own a smartphone but do not have broadband internet at home. In contrast, only 5% of those living in households earning $100,000 or more fall into this category in 2019.”
What does a smartphone-only internet life might look like? Pew Research Center put that into perspective in a survey where respondents were asked about job hunting on the internet. Some 32% of people with a reported household income of under $30,000 said that they submitted a job application by phone. For those households making more than $75,000, that figure was just 7%. (Cost is certainly a factor, yet it is encouraging to see that the reported average cost of broadband in the U.S. is dropping—down to $50 a month from just over $67 a month a year ago.)
That’s just one example of a smartphone-only internet, yet you can imagine how difficult it must be to create a resume, complete schoolwork, or work remotely when your internet experience is limited to the small screen of a phone. Contrast that with this year’s need to work and study at home. A low-income household that’s dependent on smartphones misses out. Their internet is a less useful and less productive internet experience. They simply can’t work, learn, and train at home like fully connected households can.
My hope in sharing this issue with you is so that we can all gain a bit of perspective. Far fewer people have access to a broadband internet experience than we might initially think, which results in a lack of connectivity that stunts the benefits and opportunities they and their communities can realize.
Granted, the solution for increasing broadband access largely rests with state-level broadband offices, budgeting and legislation at the federal government level, along with public partnerships and interest groups who are all pushing for improved broadband access. (And, in the states which allow it, municipal broadband solutions.) However, as individuals, we can let this reality shape some of our decision-making on a local level.
When library funding measures come up for approval in your community, consider giving them your “yes” vote, as they may present an opportunity to fund library locations and services where people can access free broadband. Likewise, give school levies your consideration, they may help get a computer in the hands of a student who doesn’t have one. (An 11% increase in PC, Mac, and Chromebook sales this year was largely driven by the education market, which needed to supply computers for in-home learning.) These are just a couple of ways that we can “think global, act local” and help others get access to a full broadband internet experience.
So as Thanksgiving approaches, let’s indeed say thanks for the connectivity and internet experience so many of us enjoy—and how vital that was this year. Likewise, let’s remember that our country and the communities within it still have a way to go before the overwhelming majority of us can benefit from that same experience—so that they can enjoy and be thankful for it too.
Stay Updated
To stay updated on all things McAfee and for more resources on staying secure from home, follow @McAfee_Home on Twitter, listen to our podcast Hackable?, and ‘Like’ us on Facebook.
The post Thankful for broadband internet, and hopeful for much more appeared first on McAfee Blogs.
FreshRSS 