FTC asks judge to hold alleged MySpace phishers in contempt

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The Federal Trade Commission (FTC) is asking a U.S. District Court judge to hold two alleged MySpace phishers in contempt of court after the pair were found to be violating a prior agreement with the agency.

Walter Rines settled with the FTC in late 2006 over a complaint that his spyware operation was luring victims to a website that deceptively downloaded unwanted and malicious software onto users' computers, the agency said Thursday in a statement.

The defendant and his company, Odysseus Marketing, agreed to forfeit $50,000 in ill-gotten gains and not to engage in stealth downloads, which the company advertised as free software, including an anonymous peer-to-peer file-sharing service that came bundled with spyware, the FTC said.

In its latest court filing in federal court in New Hampshire, the FTC accuses Rines, his new firm Online Turbo Merchant Inc., and his business partner, Sanford Wallace, of violating the settlement by participating in a MySpace phishing campaign.

The filing contends that the defendants delivered content to users without their consent, obtained personal information through phishing messages, and redirected users to websites pushing junk ads.

The FTC alleges the defendants used a technique known as “mousetrapping” to prevent users from navigating away from the redirects. This is done either through launching a continual series of pop-up ads or displaying windows that cannot be closed.

Neither Rines nor Wallace could be reached for comment.

The FTC is asking the court for a permanent injunction and demanding that Rines and Wallace forfeit the money they have made in the scheme.

Last March, MySpace announced it was suing Wallace for leading a phishing scam to steal users' login credentials. Wallace, who claimed in 1998 that he was quitting the spam business, allegedly used that information to create member profiles, groups and forums to spam users into visiting deceptive websites.

Wallace is scheduled to appear Feb. 12 in a U.S. District Court in Las Vegas to answer the charges.
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