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Sam Jain makes a living by bilking the credulous, and one of his scams nearly took down the webcomic Penny Arcade.
That’s ancient history now (2001), but I’m sure there were smiles in some quarters when Jain was charged last week with 24 counts of wire fraud as well as one count of conspiracy. Jain’s two partners are in a heap o’ trouble as well, but as Jain is on the run (possibly in the Ukraine), he won’t be locked up anytime soon.
(Note: All the parties here are presumed innocent until proven guilty, but the allegations sure do make for entertaining reading.)
Jain’s latest scam used fake ads (on real websites) to trick computer users into thinking they had a virus; Jain and his partners then sold them fake anti-virus software to fix it. But back in 2000, when webcomics were still shiny and new, Jain ran an ad network called eFront that hosted, among other things, Penny Arcade and Something Awful. At first things were rosy, but then Jain stopped sending the checks, and creators had little recourse, because eFront controlled the websites. If you have a bit of time, take a trip through memory lane with this 2005 posting at Penny Arcade, in which Mike Krahulik digs up some chat logs that show Jain and his colleague Will Bryant discussing how to stop Krahulik’s public complaints about the company and even kick him and partner Jerry Holkins off the site and have another artist take over the strip.
That didn’t happen, but Krahulik points out that the incident brought them close to the edge:
We were on the verge of loosing Penny Arcade and everything we had built. I remember when efront went bankrupt and Sam fled the country after being charged with tax evasion Tycho and I considered quitting PA. We had both quit our jobs during the few months we were receiving checks from efront. Now the money had dried up and we were unemployed. We figured we had to quit PA and try and get our old jobs back.
Fortunately, they were able to recoup, and the rest, as they say, is history. The TechEye piece links to the entire chat log, which should provide a cautionary reminder not only to be careful who you do business with, but also to be careful what you say electronically—you never know when you could be hacked.