January 31, 2019 / 12:27 AM / 23 days ago

New York settles with sellers of 'fake' online followers, 'likes'

* New York attorney general calls accord first of its kind

* Fake posts said to appear on LinkedIn, Twitter, YouTube

By Jonathan Stempel

NEW YORK, Jan 30 (Reuters) - New York's attorney general on Wednesday said she has resolved a probe into a group of Colorado companies that once sold fake followers, "likes" and views on social media platforms, in the first U.S. settlement to deem such sales illegally deceptive.

Attorney General Letitia James said the now-defunct Devumi LLC and other companies owned by German Calas generated about $15 million of revenue from 2015 to 2017 through roughly 250,000 sales of fake endorsements and engagement for platforms such as LinkedIn, Pinterest, SoundCloud, Twitter, Vimeo and YouTube.

James said the endorsements from computer-operated "bot" accounts pretending to express genuine opinions of real people deceived social media users by making those endorsed appear more popular or influential. She said it also deceived the online platforms that prohibited such activity.

Devumi's customers spanned a range of professions including actors, athletes, business people, marketers, musicians, politicians, pundits and even adult film stars.

The settlement did not address whether the customers did anything illegal. James said Calas' companies might charge $3,997 for up to 500,000 Twitter followers, or $30 for 250 likes on YouTube.

"Bots and other fake accounts have been running rampant on social media platforms, often stealing real people's identities to carry out fraud," James said. "We are sending a clear message that anyone profiting off of deception and impersonation is breaking the law and will be held accountable."

A lawyer for the defendants did not immediately respond to requests for comment.

James said Devumi and its affiliated Denver-based entities dissolved last August and September after her predecessor opened the probe, and after a New York Times article last January described some of Devumi's alleged conduct.

Calas denied that Devumi sold fake followers and said he did not know about social identities stolen from real users, the Times said.

Wednesday's settlement prohibits similar future conduct, and prevents Calas from publicly denying James' findings. The settling parties will pay $50,000 to cover costs of the New York probe. (Reporting by Jonathan Stempel in New York Editing by Bill Rigby)

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