Mr. Nikolaenko, who was arraigned in federal court in Milwaukee Friday, is alleged to have run one of the largest and most sophisticated spam networks in the world. His operation is responsible for sending about 10 billion spam messages a day at its peak, authorities say. His activities account for 32 percent of all global spam since 2007, the criminal complaint against him states.
The charges against Nikolaenko include one count of mail fraud and another charging he violated the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM), which establishes guidelines for e-mail marketing.
Nikolaenko was arrested in Las Vegas in November, but he is being arraigned in Milwaukee because that's the origin of an undercover address provided by an FBI agent who responded to one of Nikolaenko’s solicitations for male enhancement drugs in November 2009. Herbal remedies showed up instead, which is the basis of the mail fraud charge. Nikolaenko pleaded not guilty and is being held without bond. If convicted, he could serve as much as five years in prison.
The pursuit of Internet fraud is often a cat-and-mouse game between international authorities and criminal organizations located mostly in Eastern Europe, where immunity laws are weak and foreign governments do not consider Internet crime as a serious threat.
Nikolaenko’s arrest sheds light on “just how incredibly international” spam organizations are in terms of the operation and reach of their schemes, says John Levine, president of the Coalition Against Unsolicited Commercial Email, an advocacy group that helps governments write antispam laws. Nikolaenko, who lived in Moscow, worked with associates in New Zealand and the US; together they infiltrated networks around the world, including 500,000 home computers in the US using viruses that penetrate servers through booby-trapped Web pages and other methods, the complaint against him alleges.
“It was an incredible stroke of luck [that] this guy was dumb enough to come to the US. If he stayed in Russia, it would have been extremely difficult to get him arrested,” Mr. Levine says.
Spam blasts will probably slow as a result of Nikolaenko’s arrest, but they will not stop. After an illegal network is shut down, the void is often filled within weeks by competing spammers, say security experts. However, Levine is encouraged by the international cooperation that led to the arrest, which suggests that law enforcement officials are taking the threat of spam-perpetuated fraud more seriously than in the past.
“A couple of years ago, no one was going after spammers at all. But cops figured out they were not kids in basements but serious criminal organizations,” Levine says. “And they kill people [indirectly]. Here, they sell fake Viagra. In Africa, they sell fake AIDS drugs.”
The future of spam is not likely to remain e-mail-based, says Aaron Smith, senior research specialist with the Pew Research Center’s Internet & American Life Project. Recent communication methods that emerged in the past decade – including social networks, text messaging, and instant messaging – have together supplemented e-mail communication and are also spam targets.
Coupled with the more sophisticated technology are users whose radar is more attuned to detect illegal solicitations and opportunities that invite viruses.
“People have gotten acclimated to what spam is and how to deal with it,” says Mr. Smith. “They’re less trusting.”