Indian-origin man in internet fraud scheme

An Indian-origin man, along with two others, has been indicted here on charges that they duped internet users in more than 60 countries into buying fake software products of more than $100 million.

According to the 26 count indictment returned by a federal grand jury, Shaileshkumar P Jain, Bjorn Daniel Sundin and James Reno deceived internet users into falsely believing that their computers were infected with "malware" or had other critical errors to induce them to purchase "scareware" software products that had limited or no ability to remedy the purported, but nonexistent, defects.

The trio placed fake advertisements about their products on various legitimate companies' websites in a scheme "regarded as one of the fastest- growing and most prevalent types of internet fraud".

The international cybercrime scheme caused internet users in more than 60 countries to purchase more than one million bogus software products, causing victims to lose more than $100 million, the federal indictment said. Sundin and Jain owned and operated Innovative Marketing Inc, a company registered in Belize that purported to sell anti-virus and computer performance/repair software through the internet and that operated a subsidiary called Innovative Marketing Ukraine, located in Kiev.

The company had closed down last year after the US Federal Trade Commission filed a lawsuit in Maryland seeking to end the allegedly fraudulent practices. Jain, 40, who was IM's chief executive officer, is a US citizen and is believed to be living in Ukraine.

Sundin, 31, IM's chief technology officer and chief operating officer is a Swedish citizen believed to be in Sweden. Reno 26, of Ohio owned and operated the former Byte Hosting Internet Services, which operated call centers that provided technical and billing support to victim consumers on behalf of IM.

Reno is expected to present himself for arraignment at a later date in US District Court in Chicago.

Sundin and Jain were each charged with 24 counts of wire fraud, and Reno with 12 counts of wire fraud, and all three were charged with one count each of conspiracy to commit computer fraud in the 26-count indictment. Each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine. The indictment also seeks forfeiture of approximately $100 million and any funds held in a bank account in Kiev.

"These defendants allegedly preyed on innocent computer users, exploiting their fraudulently induced fears for personal gain. We will continue our efforts to identify and aggressively investigate similar schemes with the assistance of our law enforcement partners both at home and internationally," Robert Grant, Special Agent-in-Charge of the Chicago FBI Office said.

According to the indictment, after causing a series of false error messages, Sudin and Jain made internet users worldwide, including throughout the US, Sweden and Ukraine, purchase software products like 'DriveCleaner' and 'ErrorSafe', ranging in price from approximately $30 to $70, which they falsely represented would rid the victims' computers of defects, but actually did little or nothing to improve or repair computer performance, resulting in financial losses exceeding $100 million.

The duo allegedly created at least seven fictitious advertising agencies that contacted multiple victim companies pretending to act as advertising brokers on behalf of known legitimate entities that wanted to place internet ads on the unnamed victim companies' websites, when in fact the ads were unauthorised. The victim companies allegedly were defrauded of at least $85,000 in unpaid fees promised by the fictitious ad agencies.

Unknown to the victim companies, the internet ads that were placed on their websites by these fictitious agencies contained hidden computer code that "hijacked" the internet browsers of individual victims, redirecting their computers without their consent to websites controlled by Sudin and Jain.

The victims were then prompted with a series of error messages claiming that the user's computer was experiencing a critical error and the victim needed to purchase an IM-distributed software product to remedy the problem. Reno allegedly aided Sudin and Jain in creating and operating the fictitious ad agencies by providing support as a technical adviser for the computer servers and networks used to facilitate their operation.

The fictitious ad agencies included "BurnAds," "UniqAds," "Infyte," "NetMediaGroup," and "ForceUp," according to the indictment. The proceeds of sales, typically by credit card, were allegedly deposited into bank accounts controlled by the defendants and others throughout the world, and then were transferred to additional bank accounts located in Europe.