FTC to liquidate assets of rogue Internet service provider 3FN

Rogue internet company shut downThe Federal Trade Commission permanently shut down the U.S. operations of a rogue Internet service provider that hosted child pornography, spam-spitting programs, spyware and other malicious contents.

The FTC first used a court order against San Jose, Calif.-based 3FN almost a year ago, stopping its operations. The amount of spam traffic across the Internet subsequently dropped almost 15 percent by some measurements. At the time, the agency said 3FN's owner, Pricewert LLC, and other companies it owned including APS Telecom, recruited and collaborated with criminals and bragged about its services in an online forum.

3FN has not operated in the U.S. since that takedown, an agency spokeswoman said, though the company's overseas owners have not been cooperative. Today's FTC announcement includes, among other documents, a San Jose District Court order for $1,080,000 in a default judgment -- basically, restitution -- amounting to about half what the FTC was looking for. That corresponds to what the court thought 3FN has actually been earning in legitimate business. However, some criminal Internet enterprises will market themselves to the general public, often with promises of low prices, to create a sort of "human shield" for wrongdoing.

The agency said it also seized 3FN's servers and equipment and will sell them off.

The FTC also said 3FN operated botnets, vast computer networks that can be especially harmful by their anonymity. A home user's computer may be part of a botnet without the user knowing it. The networks of "zombie" computers in the botnet can be harnessed, and their combined computing power unleashed to spam, attack other computers, and attempt to break complex security.

Transcripts of communication logs filed with the court also show more than 4,500 malware programs -- including those capable of hiding on a home user's computer, stealing passwords and personal information, and sending them to criminals -- were controlled by servers hosted by 3FN.

3FN released its own statement shortly after the June court order. "You should not consider us as a law breaker or any kind of an asylum for criminals," it said.

The public may think the typical Internet criminal lives in eastern Europe, China or Russia. But many of the bad guys are working in the United States, said Garth Bruen, whose Massachusetts-based organization Knujon claims to have shut down more than 200,000 junk e-mail sites. The 3FN case "is another example that proves two poorly understood facts about cybercrime," he wrote in an e-mail interview. "It's not only murky groups from overseas. Established service providers are profiting from illicit traffic.

"Through (Internet service providers) and registrars, the Internet structure has been deeply penetrated by criminals who are using it to generate a lucrative income and are even influencing Internet policy."
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