Oregon Man Fined $84K In Spyware Case - InformationWeek

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4/19/2006
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Oregon Man Fined $84K In Spyware Case

Zhijian Chen holds the dubious honor of being the first defendant nailed by Washington state's 2005 Computer Spyware Act.

An Oregon man was fined $84,000 for scamming users with bogus security warnings that led them to a phony anti-spyware program, the Washington state attorney general said Tuesday.

In January, both Microsoft Corp. and Attorney General Rob McKenna filed lawsuits against Secure Computer of White Plains, N.Y. for allegedly selling the bogus anti-spyware program Spyware Cleaner. Three men were also charged with advertising the software: Zhijian Chen, of Portland, Ore.; Seth Traub, of Portsmouth, N.H.; and Manoj Kumar, from Maharashtra, India.

Chen is the first to be penalized in the broader case, and also holds the dubious honor of being the first defendant nailed by Washington state's 2005 Computer Spyware Act.

After admitting to breaking the 2005 law, as well as the state's Consumer Protection Act, Chen was told to pay $84,000 in fines and restitution for promoting Spyware Cleaner.

Chen used the Windows "Net send" command, which is typically used by network administrators to broadcast messages to employees such events as upcoming server downtime, to put pop-ups on users' machines that mimicked official warnings. Users duped by the bogus message who clicked on the embedded link were directed first to Chen's page, then to Secure Computer's own site.

There, users were offered a free "scan" for malicious software. As in other so-called "rogue" anti-spyware products -- dubbed "scamware" by some -- the scan always detected spyware, even if none existed. To remove the fictitious spyware, users were pitched the $49.95 Spyware Cleaner.

"Chen made thousands of dollars by sending invasive messages intended to mislead consumers into believing their computers were infected with a dangerous virus and that Secure Computer's software was the fix," said McKenna in a statement. "Nothing could be further from the truth."

Chen was paid a commission of 75 percent of the purchase price, or $37.46, for each copy of Spyware Cleaner sold to users fooled by his ersatz messages.

Under the settlement order, Chen is to pay $16,000 in restitution to users who bought Spyware Cleaner, $24,000 in fines, and almost $44,000 in attorneys’ fees.

"Let this be a warning to other online advertisers," McKenna added. "When you attempt to harm or deceive, you will pay. We will not tolerate those who try to profit by preying on consumer’s fears of spyware and other malware."

Secure Computer's various Web sites, including myspywarecleaner.com and checkforspyware.com, now only show a message which simply reads "Spyware Cleaner is not available for download or sale until further notice."

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