Accused scareware executive pleads not guilty

James Reno, one of the three men charged last week with operating a $100 million scareware business, entered a not guilty plea in Federal court in Chicago on Wednesday. According to court records, bail was set at $10,000. That’s a pretty low, considering that one of Reno’s former business associates, Shaileshkumar “Sam” Jain skipped out on a $250,000 bond last year and is now considered a fugitive.

Reno operated a company called Byte Hosting Internet Services that provided support for Jain’s various companies. He told me last fall that he didn’t make the big money that Jain and others did and suggested that he might be called as a witness in the Chicago criminal case. So perhaps bail was set low because prosecutors believe that he’ll take a plea and testify against the other two.

There’s only one problem with that: Jain, and his alleged co-cospirator Bjorn Daniel Sundin, aren’t in the U.S. Sundin is believed to be in Sweden; Jain — who has both Indian and U.S. citizenship — is thought to be in Ukraine, prosecutors say.

As Sandi Hardmeier points out in her Spyware Sucks blog, Reno has a long history with Jain. Prosecutors say that he was the guy who shipped out Jain’s counterfeit Symantec media before he got into the rogue antivirus business. Sandi also cites some pretty damning IRC chat transcripts, showing that Jain and Reno had a very close relationship, with Reno spending a lot of time visiting Jain’s company, Innovative Marketing, in Ukraine.

Prosecutors say that Innovative Marketing sold 1 million copies of its bogus software — which would often wreck computers when installed — to victims in more than 60 countries.