Locks up computer and screen . Displays a full-screen letter on faked Royal Canadian Mounted Police letterhead. "We have detected illegal actiity on your computer. You must registern with us and pay a fee at our secure payment site". Probably just a variant of other ransomware.
Does anyone know how it propagates, how to detect it and how to remove it?
Moved to Top Threats.
There are many free alternatives to the paid virus removal service. Try Googling the name of the infection or go to BleepingComputer Forums as they have most of the removal steps well rehearsed for this kind of thing and may even have a tool or at least a tutorial devoted to this pest or ones similar.
When these things hit don't touch anything, no keys or mouse clicks. Hard power off then reboot into Safe Mode and initiate System Restore. Antiviruses are powerless against them becuase of the way they work.
See the last link in my signature below for some hints and links.
Here is a good guide that explains system restore to remove Royal Canadian Mounted Police scam - http://www.system-tips.net/remove-royal-canadian-mounted-police-virus/