Russian 'King of Spam' Pleads Not Guilty

Dec. 04, 2010— -- A 23-year-old Russian man who has been called the "King of Spam" by investigators was arraigned Friday morning in Milwaukee and is being held without bail on federal charges.

Oleg Nikolaenko was arrested in Las Vegas last month, accused of violating the CAN-SPAM Act, which sets the rules for commercial email, when he allegedly masterminded a worldwide spam network that blasted out billions of e-mails.

He pleaded not guilty on Friday.According to prosecutors, Nikolaenko would place malicious code on unsuspecting users' computers and remotely hijack the computers to send out one-third of the unwanted messages around the world.

"An ongoing grand jury probe is targeting Oleg Nikolaenko ... for allegedly violating the anti-spam law, as well as abetting violations of the mail and wire fraud statutes," according to an affidavit by the FBI that was posted on TheSmokingGun.com.

According to Steve Jones, an Internet expert at the University of Illinois at Chicago, the technology Nikolaenko allegedly employed could easily spam just about every Internet user around the world in a day.

"Estimates were some computers were sending 15,000 to 100,000 emails and you multiply that by a couple hundred thousand computers around the world -- that's a billion emails an hour," Jones said.

The trail that led to Nikolaenko's arrest began last year with the arrest of a Missouri man who plead guilty to creating spam marketing for Rolex watches. When questioned, the man said that he contracted with spammers through his company Affking.

This led investigators to a man operating out of Australia and New Zealand, which directed them to the Russian botnet Mega D -- Nikolaenko is allegedly the man behind Mega D.

Jones, who is also a professor at the University of Illinois, said that the network and its discovery, is a compelling glimpse of cyber crime on a global scale.