Malicious Proxy Server

I would like to set up a malicious proxy server that would allow me to create a botnet in a controlled environment, any thoughts or suggestions?

If you want a controlled environment + play safe, then use ns2. It might take you some time to learn how to use/script (with) it, but you can simulate any network environment you want.

I will take a look at Ns2. I currently have a hardware based environment and a server with hypervisor software installed. I might spawn up a malicious proxy on a VPS and configure multiple browsers on multiple OS's running within the virtual machine to use that proxy.