Three men are facing federal fraud charges for allegedly collecting USD100 million while running an illegal "scareware" business that tricked people into buying and installing fake antivirus software. Two of the men, Bjorn Sundin and Shaileshkumar Jain, operated an antivirus company called Innovative Marketing which sold antivirus software. The third man involved, James Reno, ran Byte Hosting Internet Services, the company that operated Innovative Marketing's call centers. All three men face jail time if they are convicted.
In 2008, there were many consumer complaints about these businesses and a civil action against them, effectively putting an end to their businesses.
The U.S. Department of Justice stated that Reno is expected to turn himself in for arraignment. However, they believe that the other two suspects are living in the Ukraine and Sweden.
In an email to IDG News Service in September 2009, Reno stated that he was a young and naïve businessman that was taken advantage of by Innovated Marketing. "I made some mistakes, of course, however they kept us in the dark on a lot of their operation."
According to prosecutors, Innovative Marketing looked like a legitimate company by setting up fake advertising agencies that would buy online inventory from media companies. Afterwards, they inserted ads with hidden computer code that generated pop-up messages that were designed to look like operating system errors or antivirus scans. Prosecutors allege that users would have to buy Innovative Marketing's worthless software just to get rid of the pop-ups. The U.S. Department of Justice said, "Byte Hosting's call centers were then used to 'deflect complaints from victims who purchased Innovative Marketing's software products." The U.S. DoJ (Deaprtment of Justice) also stated, "The scheme convinced victims in more than 60 countries to buy more than 1 million bogus programs."
