Three years later, the U.S. Federal Trade Commission filed suit against Jain and the two other men charged Wednesday: Innovative Marketing Chief Technology Officer Bjorn Daniel Sundin and the man whose call center provided technical support for the products, James Reno of Amelia, Ohio.

The FTC won its court case, effectively putting Innovative Marketing and Reno's company, Byte Hosting Internet Services, out of business.

The scareware products that the three men are accused of selling are perhaps the most annoying problems on the Internet, and a constant source of complaints to security companies and federal regulators. They not only fail to protect computers, they often also bog down systems with spyware and malware.

Innovative Marketing allegedly pioneered the trade.

The company would set up fake advertising agencies with names such as BurnAds and NetMediaGroup, and then buy online advertising, pretending that it was for legitimate buyers, prosecutors say. These ads would be programmed to deliver scary-looking pop-up windows straight to users' desktops. The windows would typically look like Windows error messages or security alerts. To dismiss them, the victim would have to pull out a credit card and pay between $30 and $70 to buy Innovative Marketing's dubious products, prosecutors say.