OLYMPIA -- Washington State Attorney General Rob McKenna announced Tuesday a settlement agreement with a company that sells search-engine optimization services to small businesses.

Under the agreement filed in King County Superior Court, Internet Advancement is barred from selling or advertising its services to new customers and must allow its customers to exit existing contracts.

The Redmond, Wash.-based company, which also does business as 4GreatBuys.com, was accused of misrepresenting its ability to provide top search-engine rankings and increase Web traffic despite being previously sued by the attorney general's office.

The company and its officers - CEO Todd Wickham, president Ken Committee and secretary and treasurer Ernesto Villamor - will pay a $118,386 civil penalty and $35,959 in attorneys' fees.

The defendants also agreed to comply with a list of injunctive provisions or face an additional $450,000 penalty.

Assistant Attorney General Paula Selis, who heads the agency's Consumer Protection High-Tech Unit, said the company can continue to do business so long as it operates under the law.

"To be sure that happens, our settlement contains very specific terms and conditions on how Internet Advancement should operate and provides for substantial financial penalties should the company commit another violation," Selis said.

The attorney general's office sued Internet Advancement in August 2004, claiming that the company violated the state's Consumer Protection Act and Unsolicited Electronic Mail Act.

The company settled, promising to change its business practices. Despite that stipulated judgment, Internet Advancement continued to use the same nefarious business practices that prompted the first lawsuit, the attorney general said.

In November 2007, the attorney general's office filed a petition to enforce the 2004 settlement.

In its petition, the attorney general's office accused Internet Advancement and its officers of misrepresenting the company's ability to provide top search-engine rankings and increase Web traffic.

They were accused also of making unauthorized charges to consumer credit cards, failing to honor guarantees and refunds and unfairly structuring cancellation policy terms.

The company was also accused of making false statements concerning the company's standing with the Better Business Bureau and the Attorney General's Office, a statement said.

The attorney general's office said small businesses filed 82 complaints about Internet Advancement with their office between Oct. 28, 2004, and March 10, 2008.