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FTC axes two alleged spyware operations

Agency says Odysseus Marketing bundled bogus software with spyware; Spy Deleter charged with posing as antispyware.

The U.S. Federal Trade Commission announced Tuesday that it has permanently shut down an alleged spyware operation run by Odysseus Marketing and its principal, Walter Rines. Odysseus Marketing had deceptively installed spyware on consumers' computers by advertising free downloads that turned out not only to be bogus, but also bundled with malicious software, the agency said. The FTC has also alleged that Odysseus Marketing exploited Microsoft Internet Explorer security vulnerabilities for covert installations. Once installed, the spyware harvested personal information, changed search results and plagued browsers with advertisements. Removal of the spyware, according to the FTC, was unreasonably difficult. Tuesday's settlement bars Odysseus Marketing and Rines, who had originally been charged with spyware allegations in October 2005, from implementing secret downloads, exploiting security vulnerabilities and misrepresenting the nature of a product. Additionally, the defendants must pay $50,000 to cover ill-gotten gains and face a $1.75 million judgment.

The FTC also issued a settlement Tuesday involving John Robert Martinson, principal of Spy Deleter, formerly Mailwiper. According to the FTC, Martinson marketed his "antispyware" brands Spy Wiper and Spy Deleter by paying spyware companies Seismic Entertainment and SmartBot.Net to advertise and sell the software. When customers were barraged with spyware antics, they were given warnings to pay $30 for Spy Wiper or else face permanent problems with their computer's hardware. Martinson has been barred from further spyware practices and may have to also pay a $1.86 million judgment if a court finds that he has misrepresented his inability to pay.