'Spam King' disappears after $234m MySpace fine
Thursday 15 May 2008
MySpace.com, the social networking website owned by Rupert Murdoch's News Corporation, has won $234m (£120m) in damages over junk email sent to its members, in what is believed to be the largest anti-spam ruling ever.
A federal judge in Los Angeles made the award against Sanford Wallace, the notorious "Spam King" who has been the subject of a string of failed federal attempts to shut down his activities, and a business partner, Walter Rines, after the two men failed to come to defend themselves in court.
The pair were accused of hijacking hundreds of thousands of MySpace members' accounts and sending messages advertising Mr Wallace's ragbag of commercial websites, infuriating members and forcing MySpace to spend millions of dollars on a cat-and-mouse game with the spammers.
MySpace, though, admits that it is doubtful it will ever be paid the damages. Both have gone missing and Mr Rines has failed to pay other costs ordered by the judge throughout the 14-month case.
Indeed, the spammers have repeatedly broken an injunction against them and were continuing to taunt the company as recently as January, according to court documents. Using software that tracks links from spam emails through to underlying websites, the security enforcer for MySpace, Joseph Marotta, was directed to a Rines company webpage containing nothing but a picture of a middle finger.
Mr Wallace came to prominence in the Nineties as a proponent of junk email as a marketing tool, earnings himself the nicknames Spamford and the Spam King. He and Mr Rines are alleged to have generated 11,000 fake MySpace accounts and encouraged other users to visit a fake MySpace-sponsored website where they were induced to give up their log-in details.
This scam, known as phishing, gave him and Mr Rines access to 320,000 accounts, from where they sent 400,000 messages and posted 890,000 comments. These comments encouraged users to visit websites such as freevegasclubs.com, real-vegas-sins.com and stop-passing-gas.com. Mr Wallace claimed that he earned about $1m a year from those websites, according to court documents.
Most importantly, since the Wallace websites contained adult material, and since MySpace is open to users as young as 14, the scheme potentially exposed minors to offensive content.
Under a 2003 federal anti-spam law known as Can-Spam, each violation entitled MySpace to $100 in damages, tripled when conducted "willfully and knowingly". Judge Audrey Collins held Mr Wallace and Mr Rines jointly liable for $157m in damages and Mr Rines individually liable for a further $63m.
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