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Washington, Microsoft Pursue Alleged Spyware Scammers

January 27, 2006

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The state of Washington has filed the first lawsuit under the state's new computer spyware act. It accuses New York-based Secure Computer, as well as associates in the United States and India, of marketing software that falsely claims computers are infected with spyware and selling consumers a program that claims to remove it.

In fact, the software renders computers more susceptible to attacks.

The lawsuit and a similar suit brought by Microsoft are the result of parallel investigations by experts at Microsoft and the Attorney General's recently expanded High-Tech Fraud Unit.

"Spyware has overtaken computer viruses as the number-one threat to personal computer users," Attorney General Rob McKenna said. "This lawsuit will make it clear to those who prey on consumers' fears about spyware that we are no longer going to tolerate their heinous activities."

The state's suit alleges violations under Washington's 2005 Computer Spyware Act, as well as the federal "CAN-SPAM" Act, the state Commercial Electronic Mail Act and the state Consumer Protection Act.

"Our investigations revealed that Secure Computer, its principals and associates advertised and distributed a product called Spyware Cleaner through spam, pop-up ads and deceptive hyperlinks," McKenna explained.

"However, not only did this product fail to detect and remove spyware on the consumer's computer, it actually tampered with security settings to make the machine even more vulnerable."

The lawsuit brings charges against Secure Computer LLC, company president Paul E. Burke, and Gary T. Preston, who owns and manages Web domains for Secure Computer. Both men live in New York.

In addition, three other individuals are charged in connection with advertising Spyware Cleaner for Secure Company: Zhijian Chen, of Portland, Ore.; Seth Traub, of Portsmouth, N.H., and Manoj Kumar, of Maharashtra, India.

According to the state's complaint, Secure Computer, based in White Plains, N.Y., has marketed and sold Spyware Cleaner since at least 2004. Secure Computer owns several Web sites, including myspywarecleaner.com, myerrorfixer.com, and checkforspyware.com.

Spyware Cleaner advertises through pop-up ads that display warnings that a consumer's personal computer may be infected with harmful spyware and offer a "free scan" of the computer. If a user elects to have the free scan performed, a software program downloads, installs, and immediately executes on the user's computer.

"Our investigation found that this so-called ‘free scan' always detected spyware on a user's computer, even if none existed," McKenna said. "In order to remove this falsely detected spyware, users are instructed to purchase the full software product."

Yet, when tested on a computer that was deliberately infected with spyware, the state's investigation showed Spyware Cleaner detected virtually none of the actual spyware on the computer. The software also erased a computer's Hosts file, which can be used to store Web addresses that a user wants to block.

The state alleges that Chen, Traub and Kumar advertised Spyware Cleaner through a variety of deceptive means, including spam e-mails, hyperlink ads, and Net Send messages,. The men were paid commissions equal to 75 percent of the $49.95 purchase price of Spyware Cleaner each time someone purchased the product.

"When spyware is downloaded on your computer, it can enable a remote computer to redirect you to Web sites you don't want to visit, monitor your computer usage, and even record your keystrokes -- including your passwords and bank account numbers," said McKenna, who last year secured additional funding from the State Legislature to expand the High-Tech Fraud Unit in the Attorney General's Office.

"Unfortunately, until last year, we didn't even have a statute in Washington that specifically prohibited these activities," he said.

Washington's new spyware act prohibits inducing a computer user to download software by making false claims that the software is necessary for security purposes. It further prohibits software from surreptitiously modifying a computer's security settings. The statute carries a penalty of $100,000 per violation.

If found liable, defendants can also be fined up to $250 per violation under the federal CAN-SPAM act, $500 per violation under Washington's spam act, $2,000 per violation under the Consumer Protection Act, as well as other restitution to be determined by the court.

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