FTC gets $163 million ruling against scareware defendant

The Ukrainian operation told computer users their PCs were infected and sold them software to fix the bogus problem

A U.S. judge has imposed a judgment of US$163.2 million against a defendant accused by the U.S. Federal Trade Commission of being part of an operation that sold software to people it tricked into thinking their computers were infected with malicious software.

Judge Richard Bennett of U.S. District Court for the District of Maryland ordered defendant Kristy Ross, vice president of Business Development for Ukraine-based Innovative Marketing, in a Sept. 24 ruling. In late 2008, the FTC filed a complaint charging Ross, Innovative Marketing and other defendants with distributing scareware.

FTC charged Ross and the other defendants with conning more than 1 million consumers into buying software to remove malware supposedly detected by computer scans. The operation used elaborate and technologically sophisticated Internet advertisements saying that a system scan had detected malicious software and other dangerous files on the computer of the person viewing the ad.

The advertisements then advised computer users to clean off the malware by buying the defendants' software for $40 to $60.

Innovative Marketing, founded in mid-2002, grew to employ more than 600 people in the U.S., Ukraine, India and elsewhere, according to court documents.

Lawyers for Ross were not immediately available for comment. In a court trial, Ross' lawyers had argued that she did not control the company and should not be held liable for its operations.

Under a settlement announced in 2011, defendants Marc D'Souza and Maurice D'Souza were ordered to give up $8.2 million in profits from the operation. Marc D'Souza was an officer with the company, while his father Maurice D'Souza was charged as a relief defendant who did not participate in the scam, but allegedly profited from it. Two other defendants previously settled the charges against them, and the FTC obtained default judgments against three other defendants.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

Join the newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?