FTC Charges Scareware Operators to Pay $8 Million Settlement

Type threatpost
Reporter Brian Donohue
Modified 2013-04-17T20:09:40


The FTC doled out $8 million in fines to the operators of an online
scareware scheme. The scam involves tricking consumers into thinking their
computers are infected with malware and then selling them software to remedy problems
that doesn’t exist in the first place.

A district court order in December of 2008 requested that Marc D’Souza,
the primary facilitator of the scam, and his father Maurice D’Souza, who merely
profited from his son’s work, cease the scam, which ran fraudulent virus scans
on the computers of their victims. The scans, which the D’Souzas claimed were legitimate,
would come back showing the victims had viruses, spyware, and illegal
pornography on their computers. The FTC allegations claimed that the defendants
then used the results of these bogus scans sell legitimate Antivirus software.

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The settlement, announced yesterday, will require the pair to pay
back the $8.2 million they gained as a result of the scheme.

The charges claim that the defendants operated under a number of
aliases, doing business from a variety of different company names including
Innovative Marketing Inc. and ByteHosting Internet Services LLC. They maintained
a number of offices around the world.

Specifically, the D’Souzas
placed ads with a number of online advertisement agencies and popular websites.
The ads displayed a fraudulent system scan that claimed a user’s computer was
infected with viruses and attempted sell consumers AV software costing between
$40 and $60.

The court order further bars Marc D’Souza from involvement with
any software that interferes with consumer’s computers, from making deceptive
claims in connection with computer security-software, from using domain names
registered with false information, and from misrepresenting that he is
authorized to act on behalf of third parties.

The settlement was handed down as a 5-0 decision and was filed in
the U.S. District Court for the District of Maryland.