From: The New York Times and CNet.com —

A dissident Russian hacker has posted files — purportedly from a Russian criminal organization — outlining an insidious fraud scheme revolving around fake anti-virus software.

The ‘company’ is called Bakasoftware, apparently headquartered in Moscow, and product is called Antivirus XP or, more recently, Antivirus XP 2009. It is distributed via unsolicited e-mails. If a recipient responds to the e-mail, a nasty program is downloaded and installed, lodging itself deep in their computer. Thereafter, it issues frequent, irritating pop-up messages warning that the computer is infected with various viruses and urging the user to spend (US)$49.95 to buy the product, which will supposedly clean out the infection.

In reality, there is no anti-virus product. The criminal hackers behind the scam simply collect the (US)$49.95 and then remotely disable the pop-up messages.

But it doesn’t end there…

The malevolent software that generated the pop-ups remains on the unwitting user’s system, making it part of a clandestine network of thousands of computers — commonly called a ‘bot net’ — that can be used to broadcast spam or act as a platform to infect other computers.

It’s the latest high-profile appearance of what Internet security specialists call ‘scareware’, which basically holds users hostage to real or imaginary threats until they ransom their computers back from the crooks.