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Malware Defense History

by Dr. Nikolai Bezroukov.

Copyright: Dr. Nikolai Bezroukov 1994-2013. Unpublished notes. Version 0.80.October, 2013

Contents : Foreword : Ch01 : Ch02 : Ch03  : Ch04 : Ch05 : Ch06 : Ch07 : Ch08 : Ch09 : Ch10 : Ch11 : Ch12 : Ch13

Chapter 9: Scareware -- fake antivirus programs, data recovery utilities and like

Introduction to Scareware

Note: Material of this page reuses parts of Wikipedia article Scareware

Extortion is usually defined along the following lines (Wikipedia, Extortion ):

Extortion (also called blackmail, shakedown, outwresting, and exaction) is a criminal offence of unlawfully obtaining money, property, or services from a person, entity, or institution, through coercion. Refraining from doing harm is sometimes euphemistically called protection. Extortion is commonly practiced by organized crime groups. The actual obtainment of money or property is not required to commit the offense. Making a threat of violence which refers to a requirement of a payment of money or property to halt future violence is sufficient to commit the offense. Exaction refers not only to extortion or the unlawful demanding and obtaining of something through force,[1] but additionally, in its formal definition, means the infliction of something such as pain and suffering or making somebody endure something unpleasant.[2]

Extortionware comprises several classes of extortion oriented malware/ software which by itself provides no user value. It is specifically designed to blackmail user that he/she has computer infected with viruses, or his harddrive is failing and he can lose all the data, or that  and the only role it plays is scare user into registering the software and paying the extortionist the requires bounty.  Such software uses blackmail to coerce the user into paying for registration (Blackmail):

In common usage, blackmail is a crime involving unjustified threats to make a gain or cause loss to another unless a demand is met.[1][2] It may be defined as coercion involving threats of physical harm, threat of criminal prosecution, or threats for the purposes of taking the person's money or property.[1][3][4][5][6][7][8] It is the name of a statutory offence in the United States, England and Wales, Northern Ireland, and Victoria, and has been used as a convenient way of referring to other offences, but was not a term of art in English law before 1968. It originally denoted a payment made by English people residing along the border of Scotland to influential Scottish chieftains in exchange for protection from thieves and marauders.[3][4]

This "marketing of services via unjustified threats" uses social engineering to cause shock, anxiety, or the perception of a threat, generally directed at an unprofessional users. In a way this is racketeering and RICO statute should be applicable to companies developing extortionware.

Most classes of extortionware resemble security (first wave were fake antivirus programs) later we saw fake operating system tuning utilities (such as  registry cleaners) and in 2012  fake data recovery programs (Data Recovery Trojan).  But more and more additional classes of fake security are known. Actually any security program threat have wide appeal can be converted to scareware fake with minimal efforts. Among known fake security programs: 

This class of program tries to convince the victim to register the rogue program by bombarding the user with constant warning or threatening messages

Extortionware is typically packaged with a look and feel that mimics legitimate security software in order to blackmail customers into registrering the software e websites display pop-up advertisement windows or banners with text such as: "Your computer may be infected with harmful spyware programs. Immediate removal may be required. To scan, click 'Yes' below." These websites can go as far as saying that a user's job, career, or marriage would be at risk.[6] Products using advertisements such as these are often considered extortionware. extortionware software belong to more broad class of malware or rogue software.

A user can encounter a pop-up on a website indicating that their PC is infected. In some scenarios it is possible to become infected with extortionware even if the user attempts to cancel the notification. Typically those popups are especially designed to look like they come from the user's operating system when they are actually a webpage.

Really big money are involved

A 2010 study by Google found 11,000 domains hosting fake anti-virus software, accounting for 50% of all malware delivered via internet advertising.[8]

Starting on March 29, 2011, more than 1.5 million web sites around the world have been infected by the LizaMoon SQL injection attack spread by extortionware.[9][10]

Research by Google discovered that extortionware was using some of its servers to check for internet connectivity. The data suggested that up to a million machines were infected with extortionware.[11] The company has placed a warning in the search results of users whose computers appear to be infected.

Spyware Dialog from SpySheriff, designed to scare users into installing the rogue software. Some forms of spyware also qualify as extortionware because they change the user's desktop background, install icons in the computer's notification area (under Microsoft Windows), and generally make a nuisance of themselves, claiming that some kind of spyware has infected the user's computer and that the extortionware application will help to remove the infection. In some cases, extortionware Trojans have replaced the desktop of the victim with large, yellow text reading "Warning! You have spyware!" or a box containing similar text.

SpySheriff, exemplifies spyware/extortionware: it purports to remove spyware, but is actually a piece of spyware in itself, often accompanying SmitFraud infections. Extortionware may be promoted using a phishing scams.

Another example of extortionware is Smart Fortress. This site scares people into thinking they have lots of viruses on their computer and asks them to buy the professional service.

Uninstallation of security software. Another approach is to trick users into uninstalling legitimate antivirus software, such as Microsoft Security Essentials, or disabling their firewall.

In 2005, Microsoft and Washington State successfully sued Secure Computer (makers of Spyware Cleaner) for $1 million over charges of using extortionware pop-ups.[14] Washington's attorney general has also brought lawsuits against Securelink Networks, High Falls Media and the makers of Quick Shield.[15]

In October 2008, Microsoft and the Washington attorney general filed a lawsuit against two Texas firms, Branch Software and Alpha Red, producers of the Registry Cleaner XP extortionware. The lawsuit alleges that the company sent incessant pop-ups resembling system warnings to consumers' personal computers stating "CRITICAL ERROR MESSAGE! - REGISTRY DAMAGED AND CORRUPTED", before instructing users to visit a web site to download Registry Cleaner XP at a cost of $39.95.

On December 2, 2008, the U.S. Federal Trade Commission (“FTC”) filed a Complaint in federal court against Innovative Marketing, Inc., ByteHosting Internet Services, LLC, as well as individuals Sam Jain, Daniel Sundin, James Reno, Marc D’Souza and Kristy Ross. The Complaint also listed Maurice D’Souza as a Relief Defendant, alleged that he held proceeds of wrongful conduct but not accusing him of violating any law. The FTC alleged that the other Defendants violated the FTC Act by deceptively marketing software, including WinFixer, WinAntivirus, DriveCleaner, ErrorSafe, and XP Antivirus.

According to the complaint, the Defendants falsely represented that scans of a consumer’s computer showed that it it had been compromised or infected and then offered to sell software to fix the alleged problems. The FTC alleged that the unlawful conduct netted the Defendants more than $100 million.

On June 25, 2009, the FTC reached a settlement with two defendants, James Reno and ByteHosting Internet Services, LLC. The settlement required the two defendants to pay nearly $1.9 million to the FTC. The settlement also prohibited James Reno and ByteHosting from using deceptive “extortionware” advertising tactics and from installing malicious programs on consumers’ computers.[17]

On February 10, 2010 the United States District Court for the District of Maryland entered a default judgment and order for permanent injunction against Jain, Sundin and Innovative Marketing, Inc. that imposed a judgment of more than $163 million. Subsequently, on May 26, 2010, Jain, Sundin and Reno were indicted by a federal grand jury for the United States District Court, Northern District of Illinois for wire fraud, conspiracy to commit computer fraud and computer fraud. The indictment alleges that from December 2006 to October 2008, Jain and Sundin placed false advertisements on the websites of legitimate companies. Currently both Jain and Sundin are fugitives and the FBI is offering a $20,000 reward for information that leads to their arrest..[18]

On January 10, 2011 the FTC reached a settlement with Marc and Maurice D’Souza which resolved the lawsuit brought by the FTC. The settlement required the D’Souzas, who had voluntarily terminated their relationship with the other Defendants at the end of 2006—before much of the alleged unlawful conduct took place, to assist the FTC in obtaining $5 million that was being held in an escrow account and to pay an additional $3.2 million to the FTC.

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[Nov 25, 2012] ransomware-a-growing-menace

[Jul 17, 2011] Remove XP Antivirus 2012, removal instructions

They mention kdn.exe process, but the name can be any combination of three letters. Also registry keys mentions does not correspond those that I observed.
XP Antivirus 2012 is a deceptive and quite sophisticated rogue anti-spyware program which applies the basic tricks of scams from this category. Though it declares to be a powerful virus remover, keep in mind that this program is the only one that needs to be eliminated because it reports invented viruses. To be more precise, XP Antivirus 2012 firstly will create numerous harmless files that it will drop in the infected computer's system. Then this scam will pretend to scan your computer and immediately will report numerous viruses that in reality are nothing else but these earlier created files. Some of its alerts may state about Trojan-BNK.Win32.Keylogger.gen threat for making you scared to death and push into purchasing its license which will be offered additionally. Pay attention to the fact, that XP Antivirus 2012 is dangerous and has nothing to do with computer's protection!

XP Antivirus 2012 program has been manipulating people into believing it is useful software. However, this rogue anti-spyware mostly penetrates into a random computer system without the user's knowledge and approval and opens the backdoor of the system to let more threats or allow the scammers to reach your personal information. All this is done with a help of Trojans that infect vulnerable systems through fake video codecs and flash updates. As you can see, you should not believe XP Antivirus 2012 and its spyware detection reports as they are fabricated and have in fact nothing to do with the true condition of machine. Don't buy this software though it will definitely promise to fix your computer, but remove XP Antivirus 2012.

[Jun 01, 2010] FBI Goes After Scareware Fraud Ring

See also FBI/US Justice Department Statement and FBI Goes After Scareware Fraud Ring - Redorbit

The FBI said late last week that it has filed federal indictments against an Ohio man and two foreign residents in a move meant to halt one of the largest "scareware" malware scams.

Microsoft (NASDAQ: MSFT) hailed the indictments on its On the Issues blog because some of the bogus computer protection programs that the schemers were hawking either masqueraded as Microsoft products or strongly implied they were from the company.

According to the FBI's statement, the alleged perpetrators, who operated out of Ukraine, "caused Internet users in more than 60 countries to purchase more than one million bogus software products, causing victims to lose more than $100 million."

Scareware is a class of malware that, once installed on a user's PC, typically generates fake error messages that alert the user to purportedly serious security deficiencies or to apparent malware infections. The user is told all she or he has to do to remedy the situation is ante up for a similarly fake anti-malware repair program that actually does little to help the victim.

In this case, bogus products that go by names like DriverCleaner and ErrorSafe were sold to unassuming victims for between $30 and $70.

The scam was run by an Amelia, Ohio, man identified as James Reno in concert with Shaileshkumar P. Jain, a US citizen believed to be living in Ukraine, and Bjorn Daniel Sundin, a Swedish citizen believed to be in Sweden, the FBI said in its statement.

All three ran a company named Innovative Marketing, Inc. (IM), which is registered in Belize. The multiple-count indictment seeks $100 million in forfeitures plus any money held for IM in a bank in Kiev.

The alleged shelter company, IM, then set up "at least seven fictitious advertising agencies" that then placed booby-trapped ads on Web pages that would generate the error messages and alerts and hijack users PCs and take them to sites that supposedly sold the remedial software.

"The scareware went by various names, including WinFixer -- meant to mislead consumers into associating the bogus software with trusted Microsoft products," Tim Cranton, associate general counsel in Microsoft's Digital Crimes Unit, said in the blog post.

"At one time, WinFixer and its variants are thought to have been responsible for 75 percent of scareware worldwide," Cranton added.

Other phony products had names like Malware Alarm, Antivirus 2008, and VirusRemover 2008, the FBI statement said.

Microsoft teams helped the FBI and the U.S. Department of Justice investigate damages caused by the scheme and testified to a federal grand jury in Chicago, where the charges were filed, regarding how the malware scam worked, the blog said.

The case is just the latest in attempts by both government and the technology industry to curb scareware attacks.

Neither has Microsoft been the only technology firm targeted by such scams. For instance, the massive social networking site Facebook was hit by a similar scareware scheme in late January.

"The Department of Justice and the FBI have put a stake in the ground to protect consumers; at Microsoft, we stand beside them in the fight to make the Internet a safer place," Cranton's post concluded.

Users who are potential victims and would like to receive information regarding the criminal case may call 866-364-2621, ext. 1, for periodic updates, the FBI said.

Related Articles

[Feb 28, 2010] Remove Dr. Guard (Uninstall Guide)

Another Rogue Antivirus that uses internal proxy of port 5555 to control internet access. Install a couple of drivers (names vary, you need to compare with baseline to detect (actually names are random and can be detected as such). Put initial "bootstrap" executable into %UserProfile%\Application Data subfolder with a random name. Windows Defender actually registers the moment of infection but does not prevent it with default settings. Probably contain root kit or shell-hooks or something of this nature as computer stops responding and sometimes crashes often even after the deletion of those three components (I have found two drivers in system32/drivers folder and executable in %UserProfile%\Application Data folder that is referenced in one of the keys in CurrentVersion/Run). Check using See Remove Dr. Guard (Uninstall Guide). Again the main lesson is to have an image of C-drive and remember what data to copy from the current drive to bootable USB drive (you need to put the drive into USB enclose and boot from USB drive is image first) to the restored image. Disinfection involved too much troubles: it is not an easy task to try to outsmart those extortionists...

What this programs does:

Dr. Guard is a rogue anti-spyware program from the same family as Paladin Antivirus. This rogue is promoted and installed through the use of fake alert Trojans that advertise the program on your desktop. This rogue is also known to be bundled with the TDSS, or TDL3, rootkit. As MBAM is not capable of removing this rootkit, you may need to request further assistance in our Virus, Trojan, Spyware, and Malware Removal Logs forum to remove all of the malware on your computer.

Once downloaded and installed, Dr. Guard will attempt to uninstall various security applications in order to protect itself from being removed. The anti-malware programs that it tries to uninstall include:

The program will then load and start to scan your computer for infections. Once the scan is finished it will state that there are numerous infections on your computer, but will not allow you to remove them until you purchase the program. In reality, the infections that it shows are all fake and do not actually exist on your computer. Therefore, please do not purchase this program based upon any of the scan results it shows.

Dr. Guard screen shot
For more screen shots of this infection click on the image above.
There are a total of 8 images you can view.

Dr. Guard also employs numerous methods where it tries to trick you into thinking you are infected. The first method is the display of a Window that impersonates the legitimate Windows Security Center. The difference is that this fake version suggests you purchase Dr. Guard to protect yourself. While the program is running you will also see a constant display of fake security alerts and warnings appear on your desktop and Windows taskbar. These alerts contain dire messages stating that your computer is under attack, all of your data is being deleted, or that personal information is being sent to a remote location. Some examples of the alerts you may see include:



Windows Firewall has detected unauthorized activity, but unfortunately it cannot help
you to remove viruses, keyloggers and other spyware threats that steal your personal
information from your computer

System files of your computer are damaged. Please, restart your system ASAP.
There are some serious security threats detected on your computer. Please, remove them ASAP.

There are some serious security threats detected on your computer: viruses, trojans, keyloggers, exploits etc.
Your computer and all your personal data are in serious danger.
Protection: Click the balloon to install antivirus software.

Defenseless OS: Windows 2000/XP/Vista
Description: Spyware. Blocks access to computer. Attacks porn sites visitors.
Protection: Click the balloon to install antivirus software.

Just like the fake scan results, these fake alerts are just another tactic where Dr. Guard is trying to convince you that you have a security problem on your computer.

As you can see, Dr. Guard was created to trick you into thinking you are infected so that you will then purchase the program. It goes without saying that you should definitely not purchase this program, and if you already have, please contact your credit card company to dispute the charges. To remove this infection and any related malware, please use the removal guide below.

Threat Classification:

Advanced information:

View Dr. Guard files.
View Dr. Guard Registry Information.

HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Uninstall\Dr. Guard
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Policies\System "DisableTaskMgr"
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Run "Dr. Guard"
HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Shell Extensions\Approved "{5E2121EE-0300-11D4-8D3B-444553540000}"
HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Policies\System "DisableTaskMgr" = "1"

Entries for this program found in the Add or Remove Programs control panel:

Dr. Guard

Tools Needed for this fix:

Symptoms that may be in a HijackThis Log:

O4 - HKCU\..\Run: [asr64_ldm.exe] %Temp%\asr64_ldm.exe
O4 - HKCU\..\Run: [Dr. Guard] "C:\Program Files\Dr. Guard\drguard.exe" -noscan

Guide Updates:

02/19/10 - Initial guide creation.

[Jan 15, 2010] Antivirus System Pro -- rogue AV program with elements of extortion

For a good description see Win32-WindowsAntivirusPro Family - CA. The note below reflected my experience in removing this malware on Windows XP.

An interesting part of the problem with this malware is that it blocks execution of many programs including programs you try to launch from CD/DVD in a perfect "reverse antivirus" fashion :-). It also uses fake setting in IE proxy configuration, setting proxy to localhost (that means that this malware runs proxy on the computer). In my case the port was 5555. Using this port you actually can detect which program is used as a proxy via netstat.

When the windows screen first appears, hit ctrl-alt-del. This gives you the task manager. Then search for the program with name ending with "guard", for example xylbsguard.exe and kill it.

When you stop this program you combine use of Microsoft Security Essentials tool (free Av tool from Microsoft) with some more specific tool. For example instructions on how remove it Remove Antivirus System Pro (Uninstall Guide), recommend program Malwarebytes' Anti-Malware. The latter works OK but like virus is difficult to remove ;-)

The key here to understand that you are probably dealing with combination of infections of which Antivirus Pro is just one component which were injected when you his some rogue Web site (often of Eastern European origin). Additional components might include Alureon.F, Hotbar, Renos.KS, Renos.JW, Bravine.A, etc. Of them Alureon looks pretty disturbing:

Win32/Alureon is a family of data-stealing Trojans. These Trojans allow an attacker to intercept incoming and outgoing Internet traffic in order to gather confidential information such as user names, passwords, and credit card data. The Win32/Alureon Trojan may also allow an attacker to transmit malicious data to the infected computer. The Trojan may modify DNS settings on the host computer to enable the attacker to perform these tasks. Therefore it may be necessary to reconfigure DNS settings after the Trojan is removed from the computer.

As Antivirus Pro installs a proxy on the computer after killing *guard.exe process in memory you can run AV programs from a CD.

Of course restoring from a clean Ghost or Maxblast/Acronis True Image image, is a better way to spend your time then playing Sherlock Holmes with some unknown, probably Eastern European jerks.

Good analysis can be found at:

  1. Encyclopedia entry TrojanWin32-FakeScanti - Learn more about malware - Microsoft Malware Protection Center
  2. Win32-WindowsAntivirusPro Family - CA

Looks like the latest version of Windows Defender can be affective again this malware too.

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  1. Encyclopedia entry TrojanWin32-FakeScanti - Learn more about malware - Microsoft Malware Protection Center
  2. Win32-WindowsAntivirusPro Family - CA



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