The FTC Turns Out The Lights On Rogue ISP - Technologist
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The FTC Turns Out The Lights On Rogue ISP

FindLaw columnist Eric Sinrod writes regularly in this section about legal developments surrounding technology and the internet.

Lest you think the FTC is sitting back and letting rogue Internet Service Providers run wild in cyberspace, please consider the FTC's recent shutdown of Pricewert LLC.

According to the FTC, Pricewert knowingly hosted and actively participated in the distribution of spam, child pornography, and other harmful electronic content. 
Pricewert, as alleged by the FTC, was doing business under various names, including 3FN and APS Telecom, and actively recruited and colluded with criminals who sought to distribute child pornography, spyware, viruses, Trojan horses, phishing, botnet command and control servers, and pornography displaying violence, bestiality and incest.  

The FTC asserted that Pricewert advertised its services "in the darkest corners of the Internet," which included a forum for communications between criminals.  

The FTC further alleged that Pricewert's use of botnets (large computer networks that have been compromised and enslaved by a "bot herder" and that can be used for the sending of spam and the launching of denial of service attacks) included the control of more than 4,500 malicious software programs hosted by 3FN.  This malware is asserted to have included programs capable of keystroke logging, password stealing, data stealing, programs with hidden backdoor remote control activity, and spam distribution programs.

The FTC filed a recent lawsuit in federal court in San Jose, California and charged that Pricewert's distribution of illegal, malicious and harmful content and the deployment of botnets had compromised thousands of computers already and had caused substantial injuries to consumers.

The FTC promptly moved for a temporary restraining order, which was granted by the court.  As a result, Pricewert's alleged illegal activities are prohibited, at least for now, and its upstream Internet providers and data centers are required to cease providing services to Pricewert.  Moreover, Pricewert's assets have been frozen.

The case is not over, and Pricewert will have a chance to fully provide its factual version of events in support of its defense.  But this case should serve as notice that the FTC can and will flex its muscles when it believes that serious wrongdoing is occurring in cyberspace.

Eric Sinrod is a partner in the San Francisco office of Duane Morris LLP (http://www.duanemorris.com) where he focuses on litigation matters of various types, including information technology and intellectual property disputes.  His Web site is http://www.sinrodlaw.com and he can be reached at ejsinrod@duanemorris.com.  To receive a weekly email link to Mr. Sinrod's columns, please send an email to him with Subscribe in the Subject line.

This column is prepared and published for informational purposes only and should not be construed as legal advice.  The views expressed in this column are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.