Alleged $100M scareware sellers facing charges

27.05.2010
Three men are facing federal fraud charges for allegedly raking in more than US$100 million while running an illegal "scareware" business that tricked victims into installing bogus software.

Two of the men, Bjorn Sundin and Shaileshkumar Jain, operated an antivirus company called Innovative Marketing, which sold products such as WinFixer, Antivirus 2008, Malware Alarm and VirusRemover 2008. The third man charged, James Reno, ran Byte Hosting Internet Services, the company that operated Innovative Marketing's call centers.

The company's products generated so many consumer complaints that the FTC against Innovative Marketing and Byte Hosting in 2008, effectively putting them out of business.

On Wednesday, a grand jury in Chicago handed down the criminal charges, meaning the three men now face jail time if convicted.

Reno is expected to turn himself in for arraignment, the U.S. Department of Justice said in a Thursday. Authorities believe that Jain and Sundin are living in Ukraine and Sweden, respectively.

In a September 2009 e-mail to the IDG News Service, Reno said he was a young and naïve businessmen who was taken advantage of by Innovative Marketing. "I made some mistakes, of course," he said, "however they kept us in the dark on a lot of their operation."