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Accused Scareware mongers held in contempt of court

Fined $8,000 a day

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A federal judge has fined a Belize-based company $8,000 for each day it continues to flout his order to halt a major internet operation alleged to have duped more than 1 million computer users into buying bogus malware protection.

US District Judge Richard D. Bennett wrote in a ruling late last week that Innovative Marketing is in civil contempt for failing to comply with a temporary restraining order to stop its scareware campaign and turn over financial records. The judge imposed the fines after Sam Jain, the company's chief executive, and four other defendants failed to appear at a hearing.

The rulings come in a case filed by the US Federal Trade Commission. It outlines a scheme that's breathtaking for the degree of treachery and sophistication the defendants are accused of sowing to plaster the net with ads designed to trick viewers into paying $100 to install malware masquerading as anti-virus protection. The ads, which appeared on high-traffic websites, pimped a variety of rogue titles including WinFixer, WinAntivirus, DriveCleaner and ErrorSafe.

The suit also named ByteHosting Internet Services, an Ohio-based firm the FTC alleges provided call center service and other support Innovative Marketing needed. ByteHosting relied on Innovative Marketing for almost all of its revenue, according to the FTC. On Tuesday, the FTC gave ByteHosting and its owner, James Reno, until January 23 to respond to the allegations. According to an article by The Business Courier, Reno denied the charges and said he was unable to pay for a lawyer or travel to Baltimore because all of his company's assets have been frozen. ®

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