The FBI announced Wednesday that--working closely with law enforcement agencies in Estonia and the Netherlands--it had executed the takedown of the DNS Changer botnet, which it said was used to fraudulently generate at least $14 million through click fraud and other fraudulent techniques.

The bureau's investigation, dubbed "Operation Ghost Click," included Tuesday raids on data centers in Chicago and New York to disable a botnet command-and-control infrastructure involving 100 servers, communicating with as many as four million infected PCs worldwide. The botnet began operating in 2007, if not sooner, and by October 2011 had infected at least 500,000 computers in the United States, including systems belonging to U.S. government agencies, including NASA.

A federal indictment unsealed Wednesday accused six Estonian men--Vladimir Tsastsin, 31, Timur Gerassimenko, 31, Dmitri Jegorov, 33, Valeri Aleksejev, 31, Konstantin Poltev, 28, and Anton Ivanov, 26--of participating in the scheme. All were arrested on Tuesday in Tartu, the second largest city in Estonia, by Estonian police. Meanwhile, a seventh gang member named in the indictment, Russian national Andrey Taame, 31, remains at large. (Estonia, unlike the United States, does have an extradition treaty with Russia, although it's not necessarily respected.)

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According to the indictment, the gang signed legitimate contracts with Internet advertising firms that earned them money every time someone clicked on a link for certain advertisements, or viewed an advertisement on a website. But the indictment accused the gang of using malware to generate those clicks or impressions, as well as to block antivirus product updates. Likewise, attempting to browse to antivirus websites, such as Avast or AVG, or to the Microsoft Windows update site, would return fake server connection or page display errors.

The gang is accused of laundering its ill-gotten advertising fees through a variety of shell companies, including Rove Digital in Estonia, as well as others in Britain, Denmark, Estonia, as well as the United States. "Rove Digital is a seemingly legitimate IT company based in Tartu with an office where people work every morning. In reality, the Tartu office is steering millions of compromised hosts all over the world and making millions in ill-gained profits from the bots every year," said Feike Hacquebord, a senior threat researcher at Trend Micro, in a blog post.

Trend Micro said it was one of multiple companies that worked with investigators to help bust the botnet, as well as its operators. Trend Micro said it had traced numerous Trojan applications, as well as botnet communications, to Rove Digital, as well as affiliate sites such as Esthost, beginning in 2006.

The gang's malware used click hijacking (aka clickjacking) to reroute people who clicked on legitimate search engine results to a site that paid the attackers for the referral. For example, said authorities, someone searching for "iTunes" on Google would typically see the actual Apple iTunes domain as their first result. But if they clicked that link using a computer infected with the malware, they might instead be rerouted to the www.idownload-store-music.com website, for which the defendants received click-referral income.

Similar schemes were used for other frequent searches. Clicking on a search result involving the IRS, for example, went instead to the website for tax preparers H&R Block, while clicking on a search result for Netflix instead redirected to a shopping-comparison website.

Investigators have also accused the gang of advertising replacement fraud, meaning they substituted their own advertisements for legitimate ones, thus earning money every time someone viewed the illegitimate advertisement. Such techniques were used with the Wall Street Journal website, where a real advertisement for the American Express Plum Card was replaced with an advertisement for Fashion Girl LA, as well as on ESPN's website, where an advertisement for Dr. Pepper was replaced by an ad for a timeshare business.

"These defendants gave new meaning to the term, 'false advertising,'" said Manhattan U.S. attorney Preet Bharara, in a statement.

To be clear, the criminals weren't acting on behalf of H&R Block, Fashion Girl LA, or any of the other advertisers, but simply using them to make money. As noted in the indictment, "the defendants' conduct risked reputational harm to businesses that paid to advertise on the Internet--but that had no knowledge or desire for computer users to be directed to their websites or advertisements through the fraudulent means used by the defendants."

The gang was able to redirect browsers as a result of their malware altering computers' DNS settings so that computers received domain name services from an attacker-controlled server. The FBI has released a troubleshooting document to help people identify if their computer has been infected by the DNS Changer botnet by reviewing their PC or Mac's DNS settings.

"The correctness of your Internet browsing experience is entirely dependent on the correctness of the DNS server you use," said Paul Ducklin, head of technology for Sophos in the Asia Pacific region, in a blog post. "A dishonest DNS server can take you to fraudulent substitutes of any sites it likes. And a dishonest DNS server can be hard to spot--most dodgy servers tell the truth most of the time, telling you strategic lies when a money-making opportunity arises."