October 15th, 2008
Judge freezes assets of massive spam ring
The Federal Trade Commission won a huge antispam victory in court yesterday, with a federal courts in Chicago’s order to freeze the assets of a botnet spam group generally known as HerbalKing.
The group used botnets to spread its poison around the globe. Just one botnet was made up of 35,000 computers and could send 10 billion e-mail messages a day, according to a security research firm that helped the FTC. The New York Times reports:
F.T.C. investigators also said they monitored the group’s finances closely and that it cleared $400,000 in Visa charges in one month alone….
[O]fficials and investigators said this spam operation was perhaps the most extensive they had ever encountered, with ties to Australia, New Zealand, India, China and the United States.“They were sending extraordinary amounts of spam,” said Jon Leibowitz, an F.T.C. commissioner. “We are hoping at some level that this will help make a small dent in the amount of spam coming into consumers’ in-boxes.”
The group’s finances were frozen under CAN-SPAM but the government is pursuing criminal charges, as well.
According to the FTC,the defendants recruited spammers around the world to send billions of spam messages directing consumers to Web sites operated by an affiliate program called “Affking.” By using false header information to hide the origin of the messages, failing to provide an opt-out link, and failing to list a physical postal address, the defendants violated the CAN-SPAM Act of 2003.
The defendants include two individuals – Lance Atkinson, a New Zealand citizen living in Australia, and Jody Smith of Texas – and four companies they control: Inet Ventures Pty Ltd., Tango Pay Inc., Click Fusion Inc., and TwoBucks Trading Limited. The FTC’s complaint alleges that both Atkinson and Smith are liable for the spamming. It holds Lance Atkinson responsible for all product claims, and Smith liable for claims made for the pharmaceutical products. In June 2005, the FTC obtained a $2.2 million judgment against Atkinson and another business partner for running a similar spam affiliate program that marketed herbal products.
