Swede, US Citizen Accused of Running Scareware Scam
An international cyber crime group is accused of luring Internet users in more than 60 countries to buy more than one million bogus software products, causing victims to lose more than $100 million.
The charges allege a Cincinnati-area man and two other men believed to be living overseas deceived Internet users into believing their computers were infected with malware or had other critical errors. To solve the problem, the defendants convinced them to purchase bogus scareware software products.
Björn Daniel Sundin and Shaileshkumar P. Jain ran Innovative Marketing, Inc., a company posing as a vendor of anti-virus and computer performance/repair software. Jain, who served as IM’s chief executive officer, is a U.S. citizen and is believed to be living in Ukraine. Sundin, who acted as the company’s chief technology officer and chief operating officer, is a Swedish citizen and is believed to be in Sweden.
The third defendant, James Reno of Ohio, ran the former Byte Hosting Internet Services, which operated call centers that provided technical and billing support to victim consumers on behalf of IM. Reno is expected to present himself for arraignment at a later date in U.S. District Court in Chicago.
Sundin, Jain et al allegedly created at least seven bogus advertising agencies that contacted multiple victim companies claiming to be advertising brokers acting on behalf of known legitimate entities that wanted to place online ads on the victim companies’ websites, when in fact the ads were unauthorized. The victim companies allegedly were defrauded of at least $85,000 in unpaid fees promised by the fictitious ad agencies.
The Internet ads placed on victim’s websites contained hidden code that hijacked the browsers of individual victims, redirecting their computers to websites controlled by Sundin, Jain and others, the indictment alleges. The victims were then prompted with a series of error messages claiming their computer was experiencing a critical error and the victim needed to purchase an IM-distributed software product to remedy the problem.
After being directed to an IM scareware website, the indictment alleges three events typically occurred: the site appeared to be a warning message from the computer user’s operating system, prompting the user to click on a box to address an purported error; the site displayed an image that gave the false appearance that the computer was being scanned for various errors or viruses; and the site prompted the victim user to download a free trial version of an IM product, falsely promising the software could repair the nonexistent critical errors.
Sundin and Jain were each charged with 24 counts of wire fraud, and Reno with 12 counts of wire fraud. All three were charged with one count each of conspiracy to commit computer fraud and computer fraud. The indictment also seeks forfeiture of approximately $100 million and any money held in a bank account in Kiev.
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