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Android Infected ROM Help

Hello everybody, recently downloaded a program which gave me suspicious behaviour. It keylogs me and i think some people are tracing me. What should i do?
I have installed many antivirus and firewalls/defense systems. It doesnt seem to help me.
I have tried master resetting my LG optimus 3d max smart phone. However, that does not delete everything inside the ROM. They rom can be erases electronically via master reset. I think the virus is spreadable via usb and is patched within the RESTORATION FILE THAT loads the android operating system. So if i deete the android os, the virus will die!
How do i erase the whoole entire phone.
I want to loose everything as well. I have got no mandatory data on the phone.
Master reset will not erease everything.
MY SIM CARD is also infected. No answeres please in regards to SIM "cannot be infected because it does not have that much space to carry virus..." it does it is around a few kb actually and evey phone i transfer the SIM to gets the virus.
It uses client-server. So im the client and information goes to server/trojan - is reverse connection becuase once it infects me computer system, it utilizes my hostname of the computer to connect to the server . The client is me in this case providing data to server. Just like screen capture works. The clients sends information to server NOT the other way around even though direct connection is client - server - like simple tcp handshake :)
 
Pus, when you've followed ExtremeNerd's excellent advice, do a Nandroid backup BEFORE reinstalling all your Apps, and another one when you have the phone back the way you want it. Regarding the possibly infected SIM card. Call your carrier and say you've lost the sim and they should send you a fresh one for the same number. Virgin did for me whenI did lose a SIM.
 
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