Four defendants accused of running an illegal "scareware" business that supposedly stole more than $100 million from duped computer users narrowly avoided arrest warrants yesterday through a series of late-day legal filings in Baltimore's U.S. District Court and an agreement with the Federal Trade Commission.
Last week, Judge Richard D. Bennett promised to file arrest warrants if the defendants, who were sued by the FTC earlier this month and failed to appear at a Friday hearing, did not explain why they shouldn't be held in contempt of court for ignoring earlier orders.
A fifth corporate defendant, Innovative Marketing Inc., did not respond by yesterday afternoon's deadline. It is unclear what steps the judge will take next. Neither his office nor an FTC attorney would comment.
According to court filings, defendants Sam Jain of California, Marc D'Souza of Canada and Kristy Ross of Walkersville in Frederick County have now agreed with the trade commission to comply by Dec. 23 with a preliminary injunction freezing their assets and demanding that they cease operation and turn over multiple records.
A fourth defendant, James Reno of Ohio, filed a document outlining why he shouldn't be a party to the action.
According to the FTC's civil complaint, the defendants made their money by tricking more than 1 million computer users into purchasing bogus security software through use of pop-up ads and Web site redirection to make them believe their machines were under attack.