FTC Announces Public Workshop on Office Supply Fraud

A cyberscammer who used more than 5,500 copycat Web addresses to divert surfers from their intended Internet destinations to one of his sites, and hold them captive while he pelted their screens with a barrage of ads, was charged by the Federal Trade Commission with violating federal laws. At the request of the FTC, a U.S. District Court enjoined his activities pending further order of the court. The FTC will seek a court order to force the defendant to give up his ill-gotten gains.

"Schemes that capture consumers and hold them at sites against their will while exposing Internet users, including children, to solicitations for gambling, psychics, lotteries, and pornography must be stopped," said Timothy J. Muris, Chairman of the FTC. "In addition to violating the trademark rights of legitimate Website owners, the defendant may have placed employees in peril by exposing them to sexually explicit sites and gambling sites on the job, in violation of company policies. With more than 63 previous law suits against him for the identical practices, we believe the court will shut down the defendant's schemes permanently."

According to the FTC, the scheme works like this: The defendant registers Internet domain names that are misspellings of legitimate domain names or that incorporate transposed or inverted words or phrases. For example, he registered 15 variations of the popular children's cartoon site, www.cartoonnetwork.com, and 41 variations on the name of teen pop star, Britney Spears. Surfers looking for a site who misspell its Web address or invert a term - using cartoonjoe.com, for example, rather than joecartoon.com - are taken to the defendant's sites. They then are bombarded with a rapid series of windows displaying ads for goods and services ranging from Internet gambling to pornography. An FTC investigator entered one of the defendant's copycat domain names, annakurnikova.com , and 29 browser windows opened automatically. In some cases, the legitimate site to which the consumer was attempting to go is also launched, so that consumers may think the hailstorm of ads to which they are being exposed is from a legitimate Web site.

Once consumers are taken to one of the defendant's sites, it is very difficult for them to exit. In a move called "mousetrapping," special programming code at the sites obstructs surfers' ability to close their browser or go back to the previous page. Clicks on the "close" or "back" buttons cause new windows to open. "After one FTC staff member closed out of 32 separate windows, leaving just two windows on the task bar, he selected the "back" button, only to watch as the same seven windows that initiated the blitz erupted on his screen, and the cybertrap began anew," according to papers filed with the court.

Finally, the defendant's sites contained a "stealth" feature that was hidden under the task bar, making it invisible to consumers. ". . . The stealth page contains no content. Instead, its sole function is to act as a timer, periodically launching additional pages of advertisements, without any action by consumers. Thus, even as consumers struggle to escape defendant's multi-window mousetrapping scheme, more windows launch automatically," FTC documents say.

The FTC estimates that the defendant earns between $800,000 and $1 million annually from his scheme, charging advertisers whose banner ads and affiliate programs are included on his Web sites. According to documents filed by the FTC, "Defendant has been sued no fewer than 63 times in the last two years, including seven federal district court cases . . . and 56 arbitration proceedings. . . Despite losing 53 suits and having almost 200 of his domain names transferred to the rightful trademark owner, celebrity, or company, defendant continues his practice of diverting and trapping consumers for his personal profit."

Consumers who believe they may have been victims of this cyberscheme should contact the FTC at 202-326-2560 or at its toll-free Consumer Response Center (CRC) at 1-877-FTC-HELP and reference the FTC's case name, "Cupcake Party."

The Commission's complaint names John Zuccarini, doing business as The Country Walk, JZDesign, RaveClub Berlin, and more than 22 names incorporating the word "Cupcake," including Cupcake Party, Cupcake-Party, Cupcake Parties, Cupcake Patrol, Cupcake Incident, and Cupcake Messenger.

The Commission vote to file the complaint was 5-0. It was filed under seal in the United States District Court for the Eastern District of Pennsylvania, in Philadelphia, on September 25, 2001. The seal was lifted September 28.

NOTE: The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

Copies of the complaint 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, 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 File No. 012-3095)