consumer ally scareware antivirusTwo people involved with an international cybercrime operation that raked in millions with 'scareware' -- computer programs that pop up with fake warnings of badware infection, then bully users into paying for a bogus fix -- settled with the U.S. Federal Trade Commission for $8 million, the agency said today.

The FTC put Marc D'Souza and his father, Maurice, on the hook for repaying some of the money the scam operation took in, though the father was not involved directly, and neither admit to guilt under the settlement's terms. Both were residents of Toronto or nearby as of 2008.That sum is a small fraction of the estimated $163,167,539 a U.S. district court in Maryland said the racket scooped from unsuspecting computer users. The court issued a default judgment in June last year against Shaileshkumar P. Jain, 40, who, with Bjorn Daniel Sundin, 31, ran the kingpin organization, Innovative Marketing, out of Belize and Ukraine.

The case dates back three years, when the FTC asked the Maryland court to shut down the scheme. According to the FTC's complaint, the defendants "falsely claimed that scans had detected viruses, spyware, and illegal pornography on consumers' computers." More than a million consumers were duped, the agency said, by products with names such as Winfixer, Drive Cleaner and Antivirus XP.

Court documents portray an operation geared up to burn consumers coming and going.

Woman at computerAccording to the FBI, which helped make the case, the scareware campaign focused on people in 60 countries including the United States, Sweden and Ukraine. The fake products all shared a key aspect: They would warn users, falsely, of some type of spyware or malware infestation, or the occurrence of a "critical error," usually with an offer to "scan" the computer. Such fake scans usually would produce a list of supposed malware infections and an offer to clean or remove them for $30 to $70. After paying for them, the products did little or nothing.

Then, when confused customers called for help when the products didn't work, call center employees redirected them to buy another useless Innovative Marketing product. That means users could also have come into contact with DriveCleaner, ErrorSafe, Antivirus 2008, VirusRemover 2008, Antivirus XP 2008, Antivirus 2008 XP, Malware Alarm, IE Antivirus, and Antispywaremaster. (Go to StopBadware.org for information on these types of fake products.)

The settlement bars Marc D'Souza from "any involvement with software that interferes with consumers' computers," the agency said, as well as from "making deceptive claims in connection with computer security software; using domain names registered with false information; and misrepresenting that he is authorized to act on behalf of third parties."

The FTC obtained default judgments against three other defendants. Litigation will continue against the sole remaining defendant in the case, Kristy Ross of Maryland, the FTC said.

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