A federal appeals court has 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. Then, Ross sold them software to “fix” their non-existent problem.
In October 2012, in addition to imposing the monetary judgment, the U.S. District Court for the District of Maryland 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. In 2008, the FTC charged Ross and six other defendants with conning consumers into buying software to remove malware supposedly detected by computer scans.
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. On February 25, 2014, the U.S. Court of Appeals for the Fourth Circuit upheld the lower court’s findings stating, in part, that to rule in her favor “would effectively leave the Commission with the ‘futile gesture’ of obtaining ‘an order directed to the lifeless entity of a corporation while exempting from its operation the living individuals who were responsible for the illegal practices’ in the first place.”