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Three Men Indicted for Scareware Scheme

May 29, 2010

Officials said Thursday that three men have been indicted in connection with a Ukraine-based fraud scheme which tricked Internet users into believing their computers were infected, scamming the victims out of roughly $100 million.

The Justice Department said in a statement that Internet users in over 60 countries purchased more than one million bogus software products from the three defendants from America and Sweden.

Bjorn Daniel Sundin, a 31-year-old Swedish citizen, and Shaileshkumar Jain, a 40-year-old U.S. citizen, are both believed to be living in Ukraine.  They were charged with 24 counts of wire fraud and one count each of conspiracy to commit computer fraud.

James Reno, a 26-year-old American, was charged with 12 counts of wire fraud and one count each of conspiracy to commit computer fraud. They are all expected to appear before a U.S. District Court in Chicago.

“These defendants allegedly preyed on innocent computer users, exploiting their fraudulently induced fears for personal gain,” FBI special agent Robert Grant told AFP News.

Sundin and Jain were the owners and operators of a company called Innovative Marketing, located in Kiev, that claimed to sell anti-virus and compute repair software. Jain was IM’s chief executive while Sundin served as chief technology officer.

All of the men were accused of placing fake advertisements on legitimate company websites, which led Internet users to believe that their computers had been infected with a virus or had critical errors.

The Internet users were then tricked into buying software products with the names “ErrorSafe” and “DriveCleaner” to fix the made up problems, paying online by credit card to bank accounts in Europe controlled by the defendants.

The scheme is commonly known as “scareware” and is considered the fastest-growing form of Internet fraud.

Each count of wire fraud carries a maximum penalty of 20 years in prison.




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