FTC Puts a Permanent Halt to Illegal Spamming Operations

The Federal Trade Commission has brought a permanent halt to four illegal spamming operations – including one that offered the opportunity to “date lonely wives” and two that hijacked the computers of unwitting third parties and used them to pelt consumers with graphic sexually explicit e-mail. The FTC charged the operators with sending spam that violated provisions of the CAN-SPAM Act, and has halted the illegal spamming.

The CAN-SPAM Act requires that a spam e-mail contain accurate header and subject lines, identify itself as an ad, and include the sender’s postal address. It also requires that the spam give recipients an opt-out method, so consumers can elect not to receive messages from the spammer in the future. To ensure that consumers are not exposed content they do not wish to view, the Adult Labeling Rule requires that senders use the phrase “SEXUALLY EXPLICIT: ”in the subject line of sexually explicit e-mail messages and ensure that the initially viewable area of the message does not contain graphic sexual images. The consent agreements announced today settle charges that the spammers violated the CAN-SPAM Act, the Adult Labeling Rule, or both.

Cleverlink Trading Limited and its partners will give up $400,000 in ill-gotten gains to settle FTC charges that their spam, or that of their affiliates, violated federal law. The agency charged that their “date lonely wives” spam violated nearly every provision of the CAN-SPAM Act. It contained misleading headers and deceptive subject lines. It did not contain a link to allow consumers to opt out of receiving future spam, did not contain a valid physical postal address, and did not contain the disclosure that it was sexually explicit. It also included sexual materials in the initially viewable area of the e-mail, in violation of the FTC’s Adult Labeling Rule. A U.S. District Court judge halted the illegal spamming at the FTC’s request and froze the defendants’ assets. The settlement announced today ends that litigation. The settlement with Cleverlink, Real World Media, Brian D. Muir, Jesse Goldberg, and Caleb Wolf Wickman bars future violations of the CAN-SPAM Act and the Adult Labeling Rule and requires extensive monitoring of their affiliates for future violations. They also will give up $400,000 in ill-gotten gains.

The FTC charged that Zachary Kinion sent spam hawking adult sites, mortgage rates, and privacy software and paid other spammers commissions to send spam messages for him. The FTC charged that he hid his true originating address by routing his spam through the computers of innocent third parties. The FTC charged him with violations of the CAN-SPAM Act, and a district court judge ordered a halt to the illegal spamming, pending trial. The settlement announced today ends the litigation. The settlement bars him from sending e-mails that contain false or misleading header information, misrepresent the subject matter of the message, fail to include an opt-out option, fail to include a postal address or fail to disclose the spam is an ad. The order contains a judgment of $151,000 – the total amount he made from his illegal spamming – which is suspended because of his inability to pay. Finally, it requires that he monitor any affiliates for CAN-SPAM Act violations.

One spam operation used “spam zombies” – computers used without their owners’ knowledge or consent – to conceal the source of the sexually explicit spam. The FTC alleged that the defendants did not have authorization to use the “zombie”computers and that their spam violated provisions of the Adult Labeling Rule that prohibit sexually explicit images in the initially viewable area of an e-mail and that the label “SEXUALLY EXPLICIT: ” appear in the subject line. The settlement with William Dugger, Angelina Johnson, and John Vitale calls for them to give up $8,000 in ill-gotten gains and bars them from violating CAN-SPAM and the Adult Labeling Rule. It also requires that before they use third parties’ computers to send spam, they must obtain authorization from the computer’s owner and inform the owner how the computer will be used.

Another operator was a professional “button pusher,” who used spam to drive traffic to Web sites run by third parties. The FTC alleged that in an attempt to conceal the source of the spam, the spammer routed his promotions for pharmaceuticals and adult content through unwitting consumers’ computers. The FTC charged Brian McMullen, doing business as BM Entertainment and B Pimp, with violating the CAN-SPAM Act. The settlement bars future violations and imposes a judgment of $24,193, which is suspended based on his inability to pay. In addition, the defendant has pleaded guilty to criminal charges related to spam and unauthorized possession of access devices – credit cards. He currently is awaiting sentencing.

All of the settlements contain standard record-keeping provisions to allow the agency to monitor compliance.

The Cleverlink Trading, Zachary A. Kinion, and Brian McMullen matters were filed in the U.S. District Court for the Northern District of Illinois, Eastern Division. William Dugger, et al., was filed in the U.S. District Court for the District of Arizona.

NOTE: Stipulated final judgments and orders are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.

Copies of the complaints and stipulated final judgments and orders are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov/ftc/complaint.htm. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to thousands of civil and criminal law enforcement agencies in the U.S. and abroad.

(Civil Action No. 05C 2889 - Cleverlink)
(Civil Action No. 05C 6737 - Kinion)
(Civil Action No. 05C 6911 - McMullen)
(Civil Action No. CV06-0078-PHX-ROS - Dugger)