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Microsoft, Washington State Sue Spyware Company

The suits against Secure Computer LLC, based in White Plains, N.Y., were the first filed under Washington state's 2005 Computer Spyware Act.

Antone Gonsalves

January 25, 2006

3 Min Read

Microsoft Corp. and the Washington state attorney general on Wednesday said they filed separate lawsuits against a company that allegedly sold and marketed a bogus anti-spyware product.

The suits against Secure Computer LLC, based in White Plains, N.Y., were the first filed under Washington state's 2005 Computer Spyware Act, which prohibits bogus claims that software available for download is necessary for security reasons. It also makes illegal secretly modifying a computer's security settings. The act carries a penalty of $100,000 per violation.

The company is accused of marketing software that fraudulently claimed to remove spyware, when in fact it made computers more susceptible to attacks. The software, called Spyware Cleaner, was offered through spam, emails, hyperlink ads on search engines such as Google Inc., and through pop-up ads on Web sites. Secure Computer owned several Web sites for marketing and downloading the software, Myspywarecleaner.com, Myerrorfixer.com and Checkforspyware.com.

When a computer user visited a site or clicked on a link in an email, a pop-up would tell the person that his computer could be infected with spyware and offered a free scan, which always claimed to find spyware even when none existed, and recommended downloading the bogus software, prosecutors say. Spyware Cleaner, which sold for $49.95, appeared incapable of finding spyware and altered a computer's registry, making it more susceptible to spyware attacks.

The Attorney General's Office claimed consumers were bilked nationwide of millions of dollars. A more exact number was not available because the total number of victims was not known. Consumers who bought Spyware Cleaner can file a complaint through the office's Web site.

What's unclear is why the product modified a computer's registry, if the only motive was to con consumers out of their money.

"That's yet to be told," Assistant Attorney General Paula Selis said in an interview. "When we find out, it may cause us to go back and amend the complaint."

The state's suit alleges violation of its spyware act, as well as the federal CAN-SPAM Act, the state Commercial Electronic Mail Act and the state Consumer Protection Act. The latter three carry penalties of $250 per violation, $500 per violation, and $2,000 per violation, respectively. The court can also order restitution to victims.

The Microsoft and Washington state suits, filed Tuesday in U.S. District Court in Seattle, name as defendants Secure Computer and company president Paul E. Burke of New York. The state lawsuit also names Gary T. Preston, a New York resident who owned and managed Web domains for the company; and three other individuals connected with the advertising of the software: Zhijian Chen, Portland, Ore.; Seth Traub, Portsmouth, N.H., and Manoj Kumar, Maharashtra, India.

Microsoft alleged that the defendants in its suit used its trademarks in advertisements to falsely suggest that the Redmond, Wash., software maker sponsored or approved of the product. The company also claimed its software was adversely affected by the modifications to the Windows registry.

At total of 11 states with similar state laws against spyware were also in a position to take action against the defendants, Nancy Anderson, deputy general counsel for Microsoft, said.

Rob McKenna, attorney general for Washington state, said in an interview that cyber crime, which also includes virus distribution, identity theft and other criminal behavior, is a growing problem that led him to establish a high-tech unit shortly after taking office last year, and securing an additional $1.6 million biannually from the Legislature.

"It has been challenging to find resources for identity theft and other types of fraud," McKenna said. "But rather than cut in other areas, we went to the Legislature and found additional support."

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