Zhijan Chen, of Portland, was fined after a five-month investigation by Washington State's attorney general's Consumer Protection High-Tech Unit found Chen promoted Secure Computer's Spyware Cleaner to PC users across the U.S. in messages that faked system warnings.
Chen was the first person to be prosecuted under the state's 2005 Computer Spyware Act.
Washington State Attorney General Rob McKenna cautioned other deceptive marketers this week.
"Let this be a warning to other online advertisers – when you attempt to harm or deceive, you will pay in Washington. We will not tolerate those who try to profit by preying on consumer's fears of spyware and other malware," he said. "Chen made thousands of dollars by sending invasive messages intended to mislead consumers into believing their computers were infected with a dangerous virus and that Secure Computer's software was the fix. In fact, nothing could be further from the truth."
Chen is the first defendant to be sentenced or fined in the state's case against New York-based Secure Computer and other associates in the U.S. and India.
The Spyware Cleaner ads claimed that PCs were infected with spyware and encouraged users to pay $49.95 for a full version of the software.
Other organizations that use similar strategies are still deceiving users, warned Ron O'Brien, senior security analyst at Sophos.
"Unfortunately, there are people willing to take advantage of fear," he said. "Computer users need to understand their computers, the internet and programs they choose to use and run. Not every anti-virus or anti-spyware solution is exactly what it claims to be, especially if it's promoted through span and on a non-reputable site."