According to US Attorney Kevin Ryan, Allen Tam, of Daly
City, California was indicted on Tuesday, after an investigation by
the Federal Bureau of Investigation.
Click fraud is a general term that describes the practice of
skewing pay-per-click data by generating illegitimate ‘clicks’ or
‘hits’ on internet ads. It is more often discussed in connection
with search engine ad schemes, such as Google’s AdSense Service,
where unscrupulous website owners sometimes try to increase the
fees paid to them by Google by ensuring that third party adverts
displayed on their site are clicked as often as possible.
This case, however, concerns internet firm FreeRide, which at
the time of the alleged scam offered a ‘rewards’ program to
internet users based on various online activities that subscribers
engaged in on the firm’s website. These activities included viewing
internet advertisements (or ‘banner ads’), completing consumer
surveys, and purchasing products online.
According to the indictment, Mr Tam, 32, is alleged to have
obtained computer source code from his employer and to have used
that source code to develop a ‘robot’ program which could then be
used on FreeRide’s website.
The indictment alleges that between 2000 and 2002 Tam used the
robot program to fraudulently generate and accumulate FreeRide
points by emulating activities on FreeRide’s website. The
indictment alleges that Tam then redeemed those FreeRide points for
products offered for sale by other internet retailers, including
Amazon.com.
If found guilty, Tam faces a maximum of five years in prison and
a fine of $250,000 in respect of the conspiracy charges and all but
one of the mail fraud and wire fraud charges. However, because one
alleged mail fraud violation and one alleged wire fraud violation
occurred after the passage of the Sarbanes-Oxley Act, he faces a
maximum of 20 years in prison and a fine of $250,000 in respect of
those charges.
