Scareware Peddlers to Pay Over Eight Million Dollars

Two men have agreed to pay $8.2 million in order to settle charges brought by the Federal Trade Commission regarding their involvement in a major scareware operation.

Marc D’Souza and his father, Maurice D’Souza, both of Canadian nationality, were named as defendants along with four other people in a complaint filed by the FTC in December 2008.

Five of them, including Marc D’Souza were accused of running a fraudulent operation that involved making false claims that people's computers were infected with malware in order to trick them into buying useless software.

All of the defendants were officers of a company called Innovative Marketing, Inc., which had offices in various countries and was used as a front for the scheme.

Maurice D’Souza was the only one not involved directly, but he was named as a relief defendant after receiving fraudulently obtained money from his son.

The scareware pushed by Innovative Marketing via malvertizements included the infamous "Antivirus XP," "Winfixer" or "Drive Cleaner," which infected millions of users.

FTC claims the fraudsters managed to convince as many as one million people to pay between $40 to $60 for their rogue software.

In addition to returning the $8.2 million, Maurice D’Souza will also be banned from getting involved with software that interferes with people's computers, making deceptive claims in connection with security programs, using domain names with false registration details and lying about being authorized to act on behalf of others.

Two other defendants in this case choose to settle with the FTC so far, James Reno and his company Bytehosting Internet Services.

Default judgements were entered against three others, Innovative Marketing and its officers Daniel Sundin and Sam Jain. Legal action continues against Kristy Ross, the company's former marketing executive who was in charge of placing deceitful ads.