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Lawsuit alleges online extortion, a growing menace

By Michael Martinez, CNN
updated 7:39 PM EDT, Fri March 29, 2013
STORY HIGHLIGHTS
  • Extortion on the Internet is a growing trend, expert says
  • 10 plaintiffs file suit alleging 3 websites are extorting $500 from them
  • The three websites purport to list sex offenders
  • Website owners didn't respond or could be reached for comment

Los Angeles (CNN) -- The California man thought he put his past behind him, but then he became victim to an online scam associated more with the mafia than the Internet.

He is alleging in a federal lawsuit that three websites are running an extortion racket preying on his history as a one-time registered sex offender.

The alleged shakedown is a growing trend in cyberspace that also includes "ransomware" -- another extortion scheme that uses fake police and FBI warnings to demand money in exchange for unfreezing data on your computer, experts say.

In the case of the California man and nine other plaintiffs, their lawsuit accuses three websites of trying to extort $500 in exchange for removing their names and photographs from sites purporting to list sex offenders, though two of the plaintiffs are no longer listed on a state sex offender registry and another two plaintiffs, both women, have never been arrested or convicted of a sex offense or any crime, their attorney says.

One of the women is the wife of the California man, both of whom were interviewed by CNN with their attorney. The couple declined to give their names because none of the plaintiffs is identified in a federal lawsuit filed this month in California.

"I am forever sorry for what I did, and I paid my debt to society," the man said of his sex offense conviction in Washington state, a crime that he declined to elaborate on. "I had been rightfully removed from the Washington (sex offender registry) site, and now I'm on the other site that wants money for removal."

The man and woman, both in their 30s, were married last year, and the new husband was looking forward to finally being removed from the Washington state website 10 years after he was convicted of a sex offense.

But just as he was removed from the state government registry in January, a website claiming to list sex offenders posted his name and conviction online -- along with a link to photos of the couple, the couple said.

The website charged him $79 just to verify the posting about him -- and wanted $421 more to remove his name, photo and the link to their personal photos.

That amounts to extortion, the California couple alleges.

"I didn't pay $421 because I don't want to pay for a business like that, and the potential for them to list me again on their site and another site seems all too likely," the man said.

Added his wife: "I am thrilled to be married to him, and it seems to me that these guys are literally banking on shame, and it angers me deeply that they are presuming that I would be ashamed of my husband, which I am not."

The lawsuit lists four individuals and 10 other unidentified persons as owning or operating three websites that allegedly function as an extortion scam in violation of the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. The plaintiffs also cite California's "right of publicity" law, which "says you can't use anybody's name or photograph to help them sell something or solicit something without prior consent," said plaintiff attorney Janice Bellucci of Santa Maria, California.

"They're acting in concert and they are extorting money from people," Bellucci said of the three websites.

The three websites didn't respond to CNN requests for comment. The four defendants didn't return calls or could not be reached for comment. The defendants are Brent Oesterblad of Paradise Valley, Arizona; his brother David of Tempe, Arizona; Chuck Rodrick II of Desert Hills, Arizona, who also goes by Charles David Gilson; and Traci Heisig, also of Desert Hills, Arizona, according to the lawsuit and Bellucci.

The lawsuit alleges those individuals own or work for the websites SORarchives, Offendex and Online Detective.

Internet security expert Vincent Weafer, senior vice president of McAfee Labs in Santa Clara, California, said online extortion typically occurs when users click on a deceptive link in an e-mail -- and then suddenly a message pops up claiming to be a warning that the user has visited an illegal or illicit site.

The computer then locks up, and the warning seeks money ranging from $10 to a few hundred dollars in exchange for unlocking the computer or data, Weafer said.

In early 2010, McAfee Labs saw 5,000 cases of ransomware each quarter, but now it has grown to 200,000 cases per quarter, Weafer said.

"It follows e-mail and social networks. That's a collective trend we're seeing," he said.

Ransomware has grown because it uses an efficient, anonymous payment service. The scam began in Russia and later the former Soviet republics in Eastern Europe.

"By and large you have organized crime groups that took to this early," Weafer said.

The ransom demand is purposefully kept to a few hundred dollars, he said.

"Obviously, if I ask you for $10,000, you're not going to pay the money," Weafer said. "So the small amount is simply to make it attractive to you to pay it and make it go away."

Online security experts are concerned whether the extortionists will make good on their promise -- or even find a way to return to a computer and seek more money.

"Will they free the machine after you pay?" says a McAfee Threats Report for the fourth quarter of 2012. "There are no guarantees, and anonymous payment systems make it basically impossible to track their movements."

The California husband sent an e-mail to a person who operates SORarchives, who responded under a pseudonym with a Gmail address, the husband said. The husband demanded his name erased from the site. He refused to pay the additional $421 for removal.

"They became fairly belligerent in their response and insulting," the California man said about the e-mail response. "There was some profanity in there too, which they graciously asterisked out."

The federal lawsuit represents a legal initiative on behalf of the California Reform Sex Offender Laws organization, a nonprofit that says public sex offender registries and residency restriction laws don't protect children and instead dehumanize individuals and their families. Saying every sex offense should be judged on its own merits, the group asserts public money would be better spent on prevention, healing and rehabilitation.

Bellucci is president of the California group.

The California couple are members of the group, as is the other California plaintiff, a man in his 60s. He is a registered sex offender and was convicted in 1979 in California for a sex offense, the lawsuit said. The other plaintiffs live in Washington, Kentucky, Tennessee and Oregon.

In a telephone interview with CNN, the California man in his 60s said he has new fears about his safety with the additional publicity from the three websites posting his name and photograph. In the past, he has been attacked because of his registry on the California government's sex offender website. His daughter was harassed out of school because of his crime, he said.

"It misrepresents who I am, and that opens me up for potential retaliation for vigilante violence, which I've already experienced now twice," the man said of the three websites.

He discovered his name on the three sites when a friend searched his name on the Internet and found it listed on the three websites, he said. After paying the websites $79 for an initial inquiry into the matter, he refused to pay the additional $421 the sites are seeking to remove his name and photograph, he said.

"It's a witch hunt," he added. "It's a way to make money off the backs of those who have this horrible tag of being a sex offender, of which people don't have a correct view of what that really means. They have a one-size-fits-all and ... extreme view that sex offenders are damaged humans who will always re-offend.

"That's not the case," he said.

The federal government website http://www.onguardonline.gov/ offers guidance and contact information in case you find yourself dealing with cybercrime.

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