But first on to the solution
The pop up blocks access to the close button but we can easily force-kill Safari from the activity monitor. Of course I had about nine million important tabs open and didn't want to lose them with a fresh Safari restart. Searching online some suggest trying to trigger Command-W quickly after pressing enter before the popup regenerates. Command-W normally closes the active tab but in my case I could never get it to trigger fast enough.
Steps to stop the popup while retaining current session
1) Open the "Activity Monitor" app and force-kill Safari
2) Hold down shift while re-opening safari (This starts a blank session but don't worry)
4) Go to "History" and "Reopen All Windows From Last Session"
5) All pages should be back including the offending popup page, be sure to go close that tab.
Why is this even possible
If you encounter a site like this while using Chrome or Firefox you'll still experience the popup but the browsers behave reasonably and allow you to stop further popups. It's insane that Safari hasn't addressed this issue, it can't be that difficult of a fix and it would quickly shut down this kind of scam. I'd go even farther and say let's just deprecate alert boxes. It's 2015 and an in tab modal is basically always a better choice than an alert window. Here is an interesting discussion on Quora about the issue. There are tens of thousands of views on the Apple Discussion Forum threads regarding this issue Apple clearly needs to address. People suggest reporting the scam to Apple but why go after the scammers when Apple could fix the actual software issue.