On February 25, 2014 a federal appeals court upheld a district court ruling that imposed a judgment of more than $163 million on Kristy Ross for her role in an operation that used computer “scareware” to trick consumers into thinking their computers were infected with malicious software, and then sold them software to “fix” their non-existent problem.
In 2008, the FTC had charged Ross and six other defendants with conning consumers into buying software to remove malware supposedly detected by computer scans. The other defendants either settled the charges or had default judgments entered against them. In its ruling from October 2012, the U.S. District Court for the District of Maryland imposed monetary judgment and permanently prohibited Ross from selling computer security software and any other software that interferes with consumers’ computer use, and from any form of deceptive marketing.
Ross appealed the district court ruling, including its finding in favor of the FTC on the issue of whether Ross was a “control person” who could be held liable for the deceptive practices. As mentioned above, the U.S. Court of Appeals for the Fourth Circuit upheld the lower court’s findings.