Australian defendant, Gregory Lasrado, has agreed to settle Federal Trade Commission charges that a scheme that hijacked unwitting Internet surfers violated the FTC Act. Lasrado participated in a scam that copied existing Web sites and inserted coded instructions in the copycat sites which automatically redirected consumers to adult sites operated by the defendants. Then the scammers disabled the browser's "back" and "exit" commands so that Internet surfers trying to escape the pornographic images faced screen after screen of similar material and advertisements for other adult sites. The FTC obtained a permanent injunction from the U.S. District Court for the Eastern District of Virginia and a court order to permanently purge this scam from the Internet in default judgments against two defendants, WTFRC Pty Ltd. and Guiseppe Nirta. A third defendant, Carlos Pereira, has evaded law enforcement authorities in Portugal. The Stipulated Final Judgment and Order announced today will bar the illegal practices and resolve the case against Lasrado.
"This case illustrates the importance of cross-border cooperation between consumer protection agencies, especially as we patrol the 'Net," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection. "The Australian Competition & Consumer Commission and the Portuguese Instituto do Consumidor rendered invaluable assistance in the investigation and resolution of the case. Working together, we've kicked this scam off the net and let the scammers know they can't snub the law."
In September 1999, the FTC filed a complaint in U. S. District Court seeking to halt the scheme. According to the FTC complaint, in a practice called "pagejacking," the defendants made exact copies of Web pages posted by unrelated parties, including the imbedded text that informs search engines about the subject matter of the site. Then they made one change that was hidden from view: they inserted a command to "redirect" any surfer coming to the site to another Web site that contained sexually-explicit, adult-oriented material. Internet surfers searching for subjects as innocuous as "Oklahoma tornadoes" or "child car seats" would type those terms into a search engine and the search results would list a variety of related sites, including the bogus, copycat site of the defendants. Surfers assumed from the listings that the defendants' sites contained the information they were seeking and clicked on the listing. The "redirect" command imbedded in the copycat site immediately rerouted the consumer to an adult site hosted by the defendants. Once there, consumers were victimized by another scam. The defendants "mouse trapped" consumers by incapacitating their Internet browser's "back" and "close" buttons, so that while they were trying to exit the defendants' site, they were sent to additional adult sites in an unavoidable, seemingly endless loop.
The settlement announced today bars Lasrado from posing as another Web site; from inserting any type of code that redirects consumers to any Web page or Web site he owns, operates or is affiliated with; and from misrepresenting the contents of his Web pages through the use of meta tags or other means. The settlement also will bar him from "mousetrapping," and from providing false contact information in connection with domain name registration. The settlement also will bar Lasrado from failing to clearly and conspicuously disclose material terms and conditions in connection with the advertising, promotion, offering for sale, sale or provision of any goods or services on the Internet. He would be required to disclose the name or names of his business, the geographic address and e-mail or telephone contact numbers. The settlement contains certain record keeping provisions to allow the Commission to monitor compliance.
This case was investigated and evidence was gathered in the FTC's Internet lab. The lab was established to provide agency lawyers and investigators with hi-tech tools to investigate hi-tech consumer problems. It allows investigators to search for fraud and deception on the Internet in a secure environment. To capture Web sites that come and go quickly, the lab provides the necessary equipment to preserve evidence for presentation in court.
The Commission vote to file the Stipulated Final Judgment and Order was 5-0.
NOTE: A Stipulated Final Judgment and Order is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Stipulated Judgments have the force of law when signed by the judge.
Copies of the stipulated final judgment and order are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357).
(FTC File No. X99 0088)