Click Once for Mail Fraud, Twice for Wire Fraud

One Internet-related criminal prosecution that has gotten surprisingly little public attention so far involves the hot topic of “click fraud.” On March 28, a federal grand jury in the Northern District of California indicted a man on charges of conspiracy, mail fraud, and wire fraud for allegedly running a “click fraud” scheme against the online business FreeRide from 2000 to 2002. [See http://www.usdoj.gov/usao/can/press/html/2006_03_29_tam.indictment.press.htm]

The press release by the U.S. Attorney’s Office alleges that the defendant obtained computer source code from his employer, K.C. Multimedia, and used that source code to develop a “robot” program for use on FreeRide’s website. [For the current FreeRide.com site, see http://www.freeride.com/signUp.out.php.] At the time, FreeRide offered a “rewards” program to Internet users, based on various online activities in which registered users engaged on the FreeRide site. These activities reportedly included viewing banner ads, completing consumer surveys, and purchasing products online. The indictment alleges that the defendant used the “robot” program he developed to fraudulently generate and accumulate FreeRide points by emulating activities on the FreeRide site, then redeemed those points for products that other Internet retailers, including Amazon, offered for sale.

Even though this may be the first federal prosecution for “click fraud” in the country, it’s interesting to note that so far the indictment got only passing attention from UPI [http://www.physorg.com/news62920503.html], the San Jose Mercury News [http://www.mercurynews.com/mld/mercurynews/news/columnists/14360231.htm], and a law firm [http://www.theregister.co.uk/2006/04/03/click_fraud_perpetrator_charged/].