New York Attorney General, Microsoft File Lawsuits Against Spam Ring

Following a six-month investigation by the attorney general's office and Microsoft, New York Attorney General Eliot Spitzer on Thursday announced it has filed legal action against New York e-mail marketing company Synergy6 and its president, Justin Champion, as well as Scott Richter, president of OptInRealBig.com, Westminster, Colo.

Spitzer said that Richter is considered the world's third-largest spammer.

Microsoft, which set up "spam traps" between May and June to uncover and identify the alleged illegal spam network to assist the attorney general's investigation, filed parallel suits in the state of Washington.

In addition to the lawsuit filed in tandem with New York, Microsoft filed case against an additional five spammers who used the same transmission path in New York that led investigators to Richter and the spam network.

Spitzer made no bones about that fact that his office and Microsoft will use state laws any way they can to destroy a fraudulent business practice that allegedly enabled Richter to pocket several millions of dollars each month in profits.

"We not only want them to be shut down but to prove to other spammers that the penalty imposed will [making spamming] financially unviable," Spitzer said. "The spam model will be the loser. We will drive them into bankruptcy, and others won't come into the marketplace. There is not a viable business model for spammers," he added

The lawsuits represent the type of action envisioned by the federal spam legislation enacted yesterday, Spitzer said. However, Champion and Richter will be charged with launching seven illegal spamming campaigns in violation of state laws in New York and Washington, consumer protection statutes that prohibit fraudulent spam, Spitzer said.

Enforcement officials charge that Richter and his partners in Washington, New York and Texas sent illegal and fraudulent spam messages with forged send names, false subject lines and misrepresented sender addresses through 514 Internet Protocol (IP) addresses in 35 countries.

Spitzer, one of the ringleaders that led the antitrust case against Microsoft, said the defendants in this case crossed the line when they began sending fraudulent spam. "I've always thought of spam as the intersection of junk mail and telemarketing on steroids. It is not illegal per se, but we all know it invades privacy and is having detrimental impact on the Internet and the viability of e-commerce and has been the focus of a fair bit of prosecutorial attention," Spitzer said during a press conference in New York, noting that Microsoft identified 8,000 spam mails from Richter this spring that contained 40,000 fraudulent statements.

Each statement is punishable by a fine of $500, Spitzer said.

From the company's Web site, OptInRealBig's Richters said he was not contacted by either the New York State attorney general's office or Microsoft on the matter and denied the allegations.

"Optin and Scott Richter vigorously deny any violations of New York law and ask that their clients and friends make no decision regarding any liability on their part until they have the opportunity to respond to any allegations made against them," according to the statement.

He referred calls to his attorney, who will not be available for comment until Friday, the statement on the Web site said.

Synergy6 has offices in New York and the Netherlands. The company did not return calls for comment.

Meanwhile, Brad Smith, general counsel and senior vice president at Microsoft, said the software giant developed a root to branch investigative technique to root out the entire spamming network that will be useful in identifying spammers even if they use offshore computers to send e-mail.

Smith, a college buddy of Spitzer, quipped that Microsoft will let New York have the first crack at the spammers in a New York courtroom. "If these people have any money left after the New York case, we'd be happy to pursue the remainder," he said.

Smith and Spitzer warned spammers who use offshore systems to send spam can be electronically traced back to the United States and will be subject to U.S. law.

"Many computers [have] moved offshore, but 80 percent of top spammers live and work in the United States," said Spitzer, adding that New York code has a legal precedent for going after offshore outfits. "They can't avoid the long arm of the law."