Just released by the FTC -- Sanford Wallace (nicknamed Spamford for his history of spamming) and his company Smartbot.net have been ordered to shut down operations and give up $4,089,500 of their ill-gotten gains. Wallace's partner,
Walt Rines, (nicknamed Picklejar by some), was ordered to give up $227,000 in ill-gotten gains as well. Rines distributed ads containing Spamford's spyware. Correction -- it was ad-broker Jared Lansky that has to pay the $227,000, not Rines. See below for notes
The FTC alleged that 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.
Correction: In my joy over Spamford's fate, I misread the FTC announcement about Walt "picklejar" Rines. His case has not been resolved yet. The FTC sued Rines last October and the complaint was amended on May 4. The FTC documents on Rines' case are here.
I posted some additional information at my SpywareWarrior blog including a mention of the other perp in the SpyWiper SpyDeleter action, Rob Martinson.