Two sentenced in major e-mail spam scam

Steve Shklovskiy and Yan Shtok, both 23, were sentenced December 27 for masterminding the e-mail scheme that took place in September of 1999 and wreaked havoc on a number of ISPs, said Christopher Johnson, senior litigation counsel for the organised crime strike force of the US Attorney's office in Los Angeles on Wednesday. A US District Court judge ordered the two pay restitution of $US104,000 and serve 27 months in jail.

Shklovskiy and Shtok in September of 1999 with the use of some commercial software were able to harvest e-mail addresses and then send out more than 50 million e-mails through a FlashNet (a division of Prodigy Communications) e-mail account, Johnson said.

The two sent out e-mails that asked job seekers to pay $US35 to learn how to make thousands of dollars by working out of their homes stuffing envelopes, he said. On one occasion, the pair spent 24 hours sending spam and on one other 26-hour period in mid-September 1999, he said. Many of the messages were targeted at colleges or markets where typically people are in need of work.

The job seekers were supposed to send the registration fee to a post office box in Los Angeles. If the recipient tried to reply to the e-mail, the job seeker would discover the e-mail address from bigbear.net, which is controlled by Mountain Telecom, was not active, Johnson said.

Mountain Telecom in Big Bear Lake, California, could not be reached for comment. But the ISP told prosecutors that the spam caused the company to receive more than 100,000 complaints and at one time it hired three full-time people to deal with them, Johnson said. Disgruntled users also may have caused Mountain Telecom's servers to shut down and impacted the Web service of some 500 companies using the ISP's network, he added.

US Postal Service inspectors staked out the post office boxes during a five-week period, Johnson said. At the same time, postal service inspectors began deciphering the IP (Internet Protocol) addresses of the spam and learned that Shtok had paid for the FlashNet e-mail account with a credit card, Johnson said.

Ultimately, four men were arrested for their roles in the scam in November 1999. The two other men pleaded guilty to lesser charges and in July 2000 received three years probation, Johnson said.

Search warrants were issued and used to search the homes of Shklovskiy and Shtok. Prosecutors learned the two had ties to Russian organised crime. Prosecutors also discovered evidence of insurance and medical fraud, Johnson said. It was eventually determined that the two defrauded victims out of between $US250,000 and $US300,000. None of the money was ever recovered, Johnson said.

Prior to the sending of the 50 million e-mails in September 1999, for more than a year the men were also involved in spamming tens of thousands of people with similar e-mails, Johnson said. These spam attacks impacted ISPs like America Online, AT&T's Worldnet and MindSpring Enterprises, Johnson said.

If collected, most of the restitution money, about $US100,000, will go to Mountain Telecom for lost revenue dealing with the spam and the complaints it generated. The remainder will go to fraud victims who were identified, Johnson said.

New technology provided a quick avenue for a scam that with traditional mail would have cost millions of dollars, Johnson said.

"To do the same fraud with real mail, it would cost $US16.5 million in postage to send out the same volume," he said. "The Internet has provided a new avenue for these crooks."

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Evans

PC World
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?