Jeanson James Ancheta, 20, of Downey, California, was arrested on Thursday morning by FBI special agents, apparently the first time that someone has been charged in connection with selling access to botnets.
He has been charged with, among other things, attempting to cause damage to protected computers, causing damage to computers used by the federal government in national defence, accessing protected computers without authorisation to commit fraud and money laundering.
The 17-count indictment alleges that Ancheta wrote malicious computer code, spread that code to assemble armies of infected computers, and sold access to the infected computers for the purpose of launching distributed denial of service (DDoS) attacks or sending spam.
Ancheta also allegedly used the botnets to generate income from the surreptitious installation of adware on the infected computers.
The first conspiracy alleged in the indictment accuses Ancheta of modifying and disseminating the Trojan horse program "rxbot," which allowed him to create botnets, each with thousands of internet-connected computers reporting to an Internet Relay Chat (IRC) channel that Ancheta controlled.
In a separate IRC channel, Ancheta advertised the sale of his botnets to those interested in launching DDoS attacks or distributing spam without detection.
After receiving payment from customers, according to the indictment, Ancheta would give customers control of enough botnets to accomplish their specified task. Ancheta would also provide an instruction manual that included the commands needed to instruct the botnets to launch DDoS attacks or send spam. The manual would include the malicious code that would allow the botnets to spread or propagate.
As part of his fee, Ancheta allegedly set up and tested the purchased botnet to ensure that the DDoS attacks or spamming could be successfully carried out.
The second conspiracy outlined in the indictment alleges that Ancheta caused adware to be downloaded onto the infected computers that were part of his botnet armies. To do this, Ancheta allegedly directed the compromised computers to other computer servers he controlled where adware he had modified would surreptitiously install onto the infected computers.
In addition, Ancheta had become an affiliate of several different advertising service companies, and those companies paid him a commission based upon the number of installations, according to the indictment.
To avoid detection by network administrators, security analysts and law enforcement, Ancheta would vary the download times and rates of the adware installations. According to prosecutors, when companies hosting Ancheta's adware servers discovered the malicious activity, Ancheta would redirect his botnet armies to a different server he controlled to pick up adware.
In addition, to generate the roughly $60,000 he received in advertising affiliate proceeds, Ancheta apparently caused the surreptitious installation of adware on approximately 400,000 compromised computers. Ancheta used the advertising affiliate proceeds he earned to pay for, among other things, the multiple servers used to conduct his schemes.
According to prosecutors, Ancheta used programs powerful enough to cause the infection of computers at the Weapons Division of the United States Naval Air Warfare Center in China Lake, as well as computers belonging to the Defense Information Systems Agency, a component of the United States Department of Defense.
Both networks are used exclusively by the federal government in furtherance of national defence.
Ancheta is charged with two counts of conspiracy, two counts of attempted transmission of code to a protected computer, two counts of transmission of code to a government computer, five counts of accessing a protected computer to commit fraud and five counts of money laundering.
If convicted of all charges in the indictment, Ancheta faces a maximum sentence of 50 years in prison.