As Infoworld reports, the scheme ran as follows. Victims typically received a link to a false greeting card which, when opened, installed a malware package. The next time the target attempted to log on to AOL, the program would request credit card numbers, bank account data, or other personal information. Users who refused to enter the data were prevented from logging into AOL. As schemes go, this was a fairly novel idea at the time, and I actually remember running into several systems infected this way. Dolan also sent spam purporting to be from AOL's billing department, asking customers to please reenter their billing details due to a server meltdown. As you can imagine, all of this left AOL feeling a bit perturbed.
Dolan himself has something of a history of bad behavior. He was first sentenced to two years of probation after pleading guilty to a misdemeanor count of accessing a computer without authorization. His probation was revoked in 2006, after the ruling judge discovered that he had taken several trips out of state, including at least one trip overseas. Dolan was then sentenced to nine months of imprisonment, and was charged in the AOL scam on September 28, 2006. Considering that the scam itself ran from 2002-2006, Dolan was likely making money from computer fraud both while on probation and in jail.
The federal government claimed that Dolan masterminded the scheme, but if he did, his intelligence appears to be confined solely to computing. Assistant US Attorney Edward Chang stated in a sentencing memorandum that Dolan attempted to variously bribe, coerce, and threaten various witnesses, and succeeded in convincing his girlfriend to perjure herself. Combined with his modus operandi of committing computer fraud while directly under the nose of the authorities, Dolan simply doesn't seem to be the sharpest crayon in the box.
Sharp or dull, however, he's headed to jail. Five years for fraud, two years for aggravated identity theft, followed by his supervised release, which is essentially probation. Judges are allowed to impose conditions during a supervised release, and can bar the individual in question from engaging in activities which are otherwise lawful. The judge in Dolan's case has not set the terms of the release yet, but based on his record, it's a safe bet that Dolan won't be touching a PC until 2018.