Anti-Spam Law Faces its First Test

U.S. prosecutors have filed the first criminal charges under the new anti-spam law that bars senders from hiding their identities to clog e-mail boxes with unsolicited and fraudulent messages.

Prosecutors for the Justice Department in Detroit and the Federal Trade Commission accuse four men of bombarding computer users with spam, which generated at least $500,000 through sales of a bogus appetite-suppressing skin patch for $49.95 each, Bloomberg reported.

The men allegedly sent spam to millions of e-mail accounts over several years, using 97 different website domain names, according to CNET News.com.

The FTC says it has at least 490,000 spam messages that were sent to consumers by the business operated by the four men, Phoenix Avatar, although the e-mails were sent out under a variety of company names. The FTC obtained a court order to freeze the defendants' assets and shut down their business, based in suburban Detroit.

"In-boxes are brimming with unwanted e-mail. Spammers have taken advantage of the Internet technology to conceal their identity and their whereabouts," J. Howard Beales, the FTC's consumer-protection chief, told Bloomberg. "A sleazy way to do business? Yes. Illegal? We certainly think so."

The so-called Can-Spam legislation, which went into effect Jan. 1, carries maximum sentences of five years in prison. The four defendants were also charged with mail fraud, which could mean 20 years in prison.

Christopher Chung and Mark Sadek, identified by authorities as Detroit-area residents, were arraigned on the criminal charges Wednesday in Detroit and released on bond. Two other defendants, Daniel J. Lin and James Lin volunteered to surrender, said Jeffrey Collins, the U.S. attorney in Detroit.

The FTC also obtained a court order to seize the U.S. assets of an Australia-based spam operation that also sold the diet patch to U.S. customers. By shutting down the spammers’ U.S. product-distribution operation, a source of money was lost.

Spammers don’t seem to be deterred, at least yet.

"The Feds bringing the heat against these spammers and their clients is a great victory for everyone who's been victimized by spam," said Mark Sunner, chief technology officer for New York-based MessageLabs, which monitors spam. "At the same time, with spam volumes increasing 30 percent since the Can-Spam law went into effect, there is a whole new contingent of spammers in operation. These contemporary spammers are now dressing up their messages so they appear to be legitimate. In spite of effective lawsuits, complaints and arrests, spammers are still finding ways to beat the system."

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