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FTC Shuts Down Major Spyware Ring

Posted by iMark - 2005-11-12

The Federal Trade Commission (FTC), armed with an injunction from a U.S. District Court, has shut down Enternet Media, Inc., and filed a lawsuit against that company and its affiliates for running an operation that used the lure of free browser upgrades and other free computer software to download spyware and adware on consumers' computers. Enternet Media is the creator and distributor of EliteBar.
 
The FTC announced the lawsuit Thursday after investigating the spyware operation for the last eight to 10 months with assistance from Microsoft, Webroot Software, and Google. The court has frozen the organization's assets, pending a further hearing. The FTC will seek to bar the deceptive and unfair practices permanently and require the operators to give up their ill-gotten gains.

The court also halted the deceptive downloads of an affiliate who helped spread the malicious software by offering bloggers free background music, according to the FTC. The music code downloaded by the bloggers was bundled with a program that flashed warnings to consumers who visited the blog sites about the security of their computer systems. Consumers who clicked to upgrade their computers would end up with machines infected with spyware.

"Everybody has to cheer when somebody like this gets caught," said Yankee Group analyst Laura DiDio. "Over the years, these types of crooks have gotten more clever in taking advantage of consumers. It's good that the federal authorities are on to them and finally enacting laws to deal with this issue."

Complaint Specs

The FTC's complaint alleges that the defendants' software code, once installed, tracked consumers' Internet activities and changed consumers' preferred home-page settings. The agency further alleges that the software code inserted new toolbars onto consumers' browsers and also inserted a large side frame or "window" into consumers' browsers to display ads.

The rogue software also displays pop-up ads on consumers' computer screens even when Internet browsers are not activated. In addition, the agency alleges that once the spyware was loaded on consumers' computers, it interfered with the functioning of the computer and was difficult for consumers to uninstall or remove.

According to the FTC complaint, the defendants' Web sites caused installation boxes to pop up on consumers' computer screens. One variation of the installation scheme offered several freeware applications, including music files, cell phone ringtones, photographs, wallpaper, and song lyrics. Another installation variation displayed boxes warning that consumers' Internet browsers are defective and claiming to offer free browser upgrades or security patches. Consumers who downloaded the supposed freeware or security upgrades did not receive what they were promised but instead got spyware infections.

Trail of Evidence

Webroot officials identified the EliteBar as a piece of adware that has repeatedly been on the company's list of top-ten threats. "Elitebar is a particularly deceptive piece of adware that generally propagates through the use of seemingly innocent dialog boxes, various social engineering methods, or through a java scripting error," said Richard Stiennon, vice president of threat research for Webroot. "Using their authority under the FTC act to prosecute unfair and deceptive acts that harm consumers, the FTC's case is an important step to help stem the ever-growing problem of spyware and adware."

The FTC named several defendants in the case involving the exploitive code: Enternet Media, Inc.; Conspy & Co., Inc.; Lida Rohbani, also known as Linda Rohhani and Lida Hakimi; Nima Hakimi; Baback (Babak) Hakimi, also known as Bobby Rohbani and Bobby Hakimi, individually and doing business as Networld One, all based in California.

The FTC identified the various adware and spyware components as Search Miracle, Miracle Search, EM Toolbar, EliteBar, and Elite Toolbar. The defendants do business as Enternet Media, Inc., Enternet, www.searchmiracle.com, www.c4tdownload.com, and www.cash4toolbar.com. The affiliate, also charged in the complaint, is Nicholas C. Albert, doing business as Iwebtunes and www.iwebtunes.com, based in Ohio.

Consumers may contact the FTC to report their experiences with the defendants by sending an e-mail to enternetmedia@ftc.gov or by calling 202-326-2992 to leave messages.



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