Ex-CEO charged in fake anti-virus software scheme
The former CEO of a Korean anti-virus software company was indicted yesterday on charges of distributing a fake virus-detection program to 1.26 million Internet users.
The Seoul Central District Prosecutors’ Office said yesterday that Lee Shin-ja, the 41-year-old former head of Media Port, was indicted for cyber fraud. Two other computer programmers were also charged for participating in the development of the software.
The businesswoman earned more than 9.2 billion won ($9.8 million) by cheating Internet users since 2005, the prosecution said.
Lee told reporters she had already left the company and had no comment on the charges.
According to prosecutors, Lee asked the two computer programmers to develop a free spyware detector that would allow Internet users to search their computers for files that contain malicious code, or spyware, that allows companies to track Internet use.
The program, however, was designed to give a false on-screen alarm to users by labeling clean files as infected. Users were then lured into paying for downloading a vaccine program, Doctor Virus, sold by the company.
About 3.96 million Internet users used the free software, and 1.26 million of them decided to buy the cure to treat their computers, believing that they were infected with a computer virus. They paid a monthly fee of 3,850 won for installing and maintaining Doctor Virus for a two-year period.
The prosecution and the Seoul Metropolitan Police Agency jointly launched an investigation into the anti-virus program after users complained about the service. Some said they paid a one-time fee to download the virus vaccine, but the company continued charging them a monthly subscription fee. Most paid for the service with their credit card or used cell phone billing.
“There are more than 200 anti-virus companies here in Korea, so competition is severe. This led to a major fraud like this,” an official of the prosecutor’s office said. “My guess is there will be similar fraud cases.”
The company said the current version of the software is now reliable. “We solved the problems when prosecutors started the investigation,” an unnamed company official said. “Now, everything is normal.”
By Jung Hyo-sik JoongAng Ilbo [firstname.lastname@example.org]