L.A. City Attorney Rocky Delgadillo's office has filed criminal charges against three officers of San Fernando Valley-based Enternet Media Inc., accusing them of distributing spyware.
It is the first criminal spyware case filed in the state of California. The charges include conspiracy, 24 violations of unauthorized access to computers and four counts of false advertising. If found guilty, the penalties could include up to 25 years in prison and fines of up to $170,000.
The defendants, Lida Rohbani Hakimi, Nima Hakimi and Baback Hakimi, are charged with running companies that created spyware programs such as toolbars and fictitious "security programs," that would insinuate themselves into a computer during the download of seemingly innocuous software, like music files. The toolbars would then track users' Internet activity and transmit data back to Enternet.
According to the suit, Enternet Media set up affiliate marketing agreements with advertisers that plagued users' computers with pop-up ads and unwanted search results, netting the company millions in advertising revenue.
"It's a crime of stealth, and it's one of the many new pernicious crimes that can affect thousands, even millions of people," said Don Kass, supervising attorney in the consumer protection group of the City Attorney's Office.
Enternet executives admitted that their software, which has since been labeled spyware, had been installed on 18 million computers worldwide.
"Rocky (Delgadillo) has taken a stance on this type of crime, similar to identity theft, where we're going to be tough," Kass said.
The charges come on the heels of a 2005 Federal Trade Commission investigation into the company's activities. The FTC filed a federal civil suit in November, raided the company's Canoga Park offices and froze the company's assets. The arraignment is scheduled for April 18 in L.A. Superior Court.
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