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United States Attorney Kevin V. Ryan |
DALY CITY MAN INDICTED IN "CLICK FRAUD" SCHEME
SAN FRANCISCO – United States Attorney Kevin V. Ryan announced that a federal grand jury in San Francisco indicted Allen Tam, of Daly City, California, on March 28, 2006, with conspiracy, mail fraud and wire fraud. The charges relate to a "click fraud" scheme allegedly perpetrated against the Internet business FreeRide from 2000 to 2002. "Click fraud" is a general term that describes the practice of skewing pay-per-click data by generating illegitimate "clicks" or "hits" on Internet advertisements. These charges are the result of an investigation by the Federal Bureau of Investigation. According to the indictment, Mr. Tam, 32, is alleged to have obtained computer source code from his employer, K.C. Multimedia of Cupertino and Santa Clara, California, and to have used that source code to develop a "robot" program which could then be used on FreeRide’s web site. At the time, FreeRide was an Internet business that offered a "rewards" program to Internet users based on various on-line activities that registered users engaged in on FreeRide’s web site. These activities included viewing Internet advertisements (or "banner ads"), completing consumer surveys, and purchasing products on-line. The indictment alleges that the defendant Tam used the "robot" program Tam developed to fraudulently generate and accumulate FreeRide points by emulating activities on FreeRide’s web site. The indictment alleges that Tam then redeemed those FreeRide points for products offered for sale by other Internet retailers, including Amazon.com. A court date has not yet been set for this case. The maximum statutory penalty for the conspiracy charge and for all but one of the mail fraud and wire fraud charges is 5 years of imprisonment and a fine of $250,000, plus restitution if appropriate. Because one alleged mail fraud violation and one alleged wire fraud violation occurred after the passage of the Sarbanes-Oxley Act, the maximum statutory penalty for those charges is 20 years of imprisonment and a fine of $250,000, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. An indictment contains only allegations against an individual and, as with all defendants, Mr. Tam must be presumed innocent unless and until proven guilty. The prosecution was overseen by the Computer Hacking and Intellectual Property (CHIP) Unit of the U.S. Attorney’s Office. Kyle F. Waldinger is the Assistant U.S. Attorney who is prosecuting the case. The prosecution is the result of an investigation by the Federal Bureau of Investigation. Further Information: A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can. Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.plhttps://ecf.cand.uscourts.gov/. Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov. All press inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay@usdoj.gov.
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