The Federal Trade Commission has ordered an operator of an online “scareware” scheme to pay more than $8 million to settle charges he used deceptive ads to trick people into thinking their computers were infected with malicious software, and then sold them software to “fix” their non-existent problem.

The defendant whose settlement was announced today will be required to turn over $8 million so it can be used to reimburse victims of the scam.

In December 2008, at the request of the FTC, a U.S. district court ordered a halt to the massive scheme. According to the FTC’s complaint, the defendants falsely claimed that scans had detected viruses, spyware, and illegal pornography on consumers’ computers. The FTC alleged that the defendants conned more than one million consumers into buying their software products such as Winfixer, Drive Cleaner and Antivirus XP to remove the malware the bogus scans had supposedly detected.

The FTC charged that the defendants used Internet ads that they placed with advertising networks and many popular commercial websites. These ads displayed to consumers a “system scan” that  detected a host of malicious or otherwise dangerous files and programs on consumers’ computers. The bogus “scans” would then urge people to buy the defendants’ software for $40 to $60 to clean off the malware.

Under the proposed settlement order, Marc D’Souza and his father, Maurice D’Souza,
will give up $8.2 million in ill-gotten gains.