Alleged King of Spam pleads not guilty

December 6, 2010 5:08:58 AM PST
A 23-year-old Russian man accused of masterminding a worldwide spam network is being held without bond on federal charges.

Oleg Nikolaenko, called the 'King of Spam' by prosecutors, was arraigned Friday morning in Milwaukee for allegedly violating federal laws pertaining to spam emails.

Prosecutors say Nikolaenko ran a network that involved placing malicious code on unsuspecting users' computers and then hijacking the infected machines to blast out billions of e-mails.

From Missouri to Moscow, New Zealand to the Virgin Islands, the Nikoleanko case reads like a Sherlock Holmes adventure. The investigator in this case is an FBI cyber tracker based in Milwaukee and his target was an alleged king-sized spreader of email spam.

Spam may be an annoyance, but clearly at the other end there's money to be made. The FBI says Nikolaenko ran a network so massive that on some days it accounted for a third of the world's email spam.

"Estimates were some computers were sending 15,000 to 100,000 emails and you multiply that by a couple hundred thousand computers around the world - that's a billion emails an hour," said Prof. Steve Jones, Univ. of Il. at Chicago Internet Expert.

Last year a man in Missouri plead guilty to creating spam marketing for Rolex watches. He said he contracted with spammers -- paying them more than $2 million. His enterprise - called Affking - was then traced to a middleman in Australia and New Zealand who led agents to a malware network called Mega D in Russia, the largest cyber tracking network in the world, which accounts for 32-percent of all spam. The man behind Mega D is alleged to be Nikolaenko who was arrested last month while visiting an automotive show in Las Vegas.

He didn't sit behind his computer and send spam. He's alleged to be responsible for creating a virus program that runs in the background of a computer and sends spam to another computer.

Steve Jones is a communications professor and internet expert who calls the cyber tracking - in this case - quite remarkable.

"It was fascinating to see how the chain developed. It's a global village, and a global police force now," said Jones.

Nikolaenko is held without bond because he's considered a flight risk. His Madison, Wisconsin, attorney - with the help of an interpreter - entered a not guilty plea Friday and promises a vigorous defense.

Proving cyber crime can be a challenge. Did Nikolaenko write the virus? Did he engineer its spread? Are there other hands involved? Many questions remain unanswered.


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