No Reward For Defiance

The United States Court of Appeals for the Fourth Circuit declined to vacate an “aging” damage award against a computer fraudster

In the early 2000s, Ross was a vice president of Innovative Marketing, Inc.—a company perpetrating a country-wide “scareware” scam that tricked more than one million Americans into purchasing unnecessary software to fix computer issues that did not exist. Ross helped to develop software advertisements and pop-ups that falsely represented to viewers that their computers were infected by malicious software and viruses, contained illegal pornography, or were about to suffer critical system failures. The advertisements offered remedial software (for purchase) for the fraudulently represented issues. Costs of the remedial software ranged anywhere from $30 to $100. Once purchased by desperate device owners, not only did the software do nothing to fix the purported issues—those issues never existed—but reputable computer-security vendors considered the fraudsters’ software to itself be harmful to purchasers’ devices. In the course of the scam, Ross and her co-conspirators fraudulently accumulated more than $160 million. Reaping the fruits of her duplicitous scheme, Ross enjoyed a lavish life with scam proceeds, frequenting Four Seasons resorts abroad and shopping at luxury retailers.

Suit brought by the Federal Trade Commission led to injunctive relief and a joint and several damage award of $163,167,539.95.

The relief sought here invoked a subsequent decision

In April 2021—nearly a decade after the district court entered judgment against Ross—the Supreme Court decided AMG Capital Management, LLC v. Federal Trade Commission, 141 S. Ct. 1341 (2021). There, the Court wiped out the almost entirely uniform approach of the federal circuits2 to the question of whether Section 13(b) authorized equitable monetary relief.

No benefit here

Finally, Ross’s failure to abide by the monetary judgment—and her flight from the United States—weighs against a finding of extraordinary circumstances. By all accounts, it appears as though she never intended to abide by the monetary judgment affirmed by this Court nearly a decade ago. To now grant her relief would promote the conscious avoidance of judgments with which litigants disagree—an affront to justice that we cannot condone— in hopes of realizing some distant, future benefit. We will not reward Ross’s defiance with a windfall. 

(Mike Frisch)