“Warning! You’re in danger!” wallpaper virus/Malware?

There were many browser hijackers that try to break into my computer, but this time there is this fake desktop background that suddenly appears. I really don’t know what sites I went to, but this certainly looks like a very dangerous virus or Malware.
This background reads “WARNING! YOUR’RE IN DANGER! YOUR COMPUTER IS INFECTED WITH SPYWARE!”
At that time, I tried to clean and scan my hard drives using my current antivirus program, but it says that my current antivirus program has failed and forces me to purchase their malware.
I tried rebooting my computer but the background is still there and obviously the virus or malware is still present in my computer.
Please help thanks!
The background image is shown below: I took it from another site as I could not take my image.

