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Court Slams Sanford Wallace Over Spyware
David Utter
Staff Writer
2006-05-04
 Insider Reports RSS Feed
The case against infamous spammer Wallace has seen a judge order Wallace and his Smartbot.Net company to shut down and turn over its ill-gotten gains.
Long-time Internet users will recognize Wallace's name. Long despised as a spammer of epic proportions, Wallace turned his talents to spyware. The Federal Trade Commission sued Wallace, his company Smartbot.Net, and another firm called Seismic Entertainment Productions in October 2004 over spyware.
The FTC claimed Wallace and Smartbot.Net used a flaw in Internet Explorer to carry out their plans:
Sanford Wallace and his company, Smartbot.Net, exploited a security vulnerability in Microsoft's Internet Explorer's Web browser in order to distribute spyware. The spyware caused the CD-ROM tray on computers to open and then issued a "FINAL WARNING!!" to computer screens with a message that said, "If your cd-rom drive's open . . .You DESPERATELY NEED to rid your system of spyware pop-ups IMMEDIATELY! Spyware programmers can control your computer hardware if you failed to protect your computer right at this moment! Download Spy Wiper NOW!" Spy Wiper and Spy Deleter, purported anti-spyware products the defendants promoted, sold for $30.
Instead of fighting spyware, the products delivered by Smartbot.Net and Seismic "hijacked consumers' computers without the consumers' knowledge or approval, secretly changed their settings, and barraged consumers with pop-up ads."
Consumers experienced the usual problems with their systems, like slow operations and loss of data, after loading those products.
Judge Joseph DiClerico, Jr ruled in District Court in New Hampshire that Wallace and Smartbot.Net must give up over $4 million they have made from sales of the products. They are also barred from placing spyware onto consumers' PCs or otherwise altering their systems.
The FTC also noted it reached a settlement with OptinTrade and Jared Lansky over their similar practices. "Lansky, an ad broker who disseminated ads containing Wallace's spyware, will give up $227,000 in ill-gotten gains," said the FTC.
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Tags: Sanford Wallace, Spyware
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About the Author:
David Utter is a business and technology writer for SecurityProNews and WebProNews.
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