Innovative Marketing Ukraine (IMU), a fraud operation, was at the center of a complex underground corporate empire with operations stretching from Eastern Europe to Bahrain; from India and Singapore to the United States. A researcher with anti-virus software maker ” McAfee Inc ” who spent months studying the company’s operations estimates that the business generated revenue of about $180 million in 2008, selling programs in at least 2 dozen countries. ” They turned compromised machines into cash, ” said the researcher, Dirk Kollberg.

The company built its wealth pioneering scareware programs that pretend to scan a computer for viruses, and then tell the user that their machine is infected. The goal is to persuade the victim to voluntarily hand over their credit card information, paying $50 to $80 to ” clean ” their PC.

Scareware, also known as rogueware or fake antivirus software, has become one of the fastest-growing, and most prevalent, types of internet fraud. Software maker Panda Security estimates that each month some 35 million PCs worldwide, or 3.5 percent of all computers, are infected with these malicious programs, putting more than $400 million a year in the hands of cybercriminals. “When you include cost incurred by consumers replacing computers or repairing, the total damages figure is much, much larger than the out of pocket figure,” said Ethan Arenson, an attorney with the Federal Trade Commission who helps direct the agency’s efforts to fight cybercrime.

Groups like Innovative Marketing build the viruses and collect the money but leave the work of distributing their merchandise to outside hackers. Once infected, the machines become virtually impossible to operate. The scareware also removes legitimate anti-virus software from vendors including Symantec Corp, McAfee and Trend Micro Inc, leaving PCs vulnerable to other attacks.

When victims pay the fee, the virus appears to vanish, but in some cases the machine is then infiltrated by other malicious programs. Hackers often sell the victim’s credit card credentials to the highest bidder.

source: http://www.reuters.com/article/idUSTRE62N29T20100324?type=technologyNews