Self-proclaimed reformed spammer Ryan Pitylak and his former partners have agreed to pay $2.5 million plus attorney fees to settle a lawsuit bought by the state of Texas while the businesses they ran have been ordered by a judge to pay $7.5 million, according to the Texas attorney general.
Contrary to press reports, Pitylak and his partners have not agreed to pay $10 million.
Under a settlement with the state, Pitylak owes $1 million in civil penalties. He has already paid $225,000 in attorney fees, according to the Texas attorney general’s office.
Pitylak’s business partners, Mark Trotter and Alan Lee Refaeli, have also agreed to pay $1 million and $500,000 in civil penalties, respectively, plus attorney fees in the range of tens of thousands of dollars, according to the Texas attorney general’s office.
At the same time, a Texas court ordered LeadPlex Inc, LeadPlex LLC, Payperaction LLC and Eastmark Technologies—all companies run by Pitylak and his partners—to pay $7.5 million.
It is unclear whether the companies will be able to pay the fine.
“Given the level of violation that occurred, we thought $7.5 million was justified,” said Tom Kelley, a spokesman for Texas Attorney General Greg Abbott. “It doesn’t reflect the amount of money they’ve made necessarily.”
The men and the companies were accused of sending millions of unsolicited e-mails containing misleading subject lines and fraudulent body copy under at least 250 assumed names, all illegal under the federal Can Spam Act.
The $7.5 million judgment reflects a fine of $25,000 a day for 300 days of illegal spamming, according to court documents.
In a separate settlement with Microsoft Corp., Pitylak agreed to pay $1 million.
Meanwhile, Pitylak claims he has seen the error of his ways and is dedicating his life to helping companies fight spam. “Over time I have come to see how I was wrong to think of spam as just a game of cat and mouse with corporate email administrators. I now understand why so much effort is put into stopping it,” Pitylak wrote in an online post. “The settlements with Microsoft and the Attorney General’s office have been a serious reality check: harsh, but good, and in the public’s best interest. I’m now working earnestly to help other entrepreneurs avoid the traps that deceived me and led me to make questionable business choices.” Pitylak did not return a call or an e-mail request at deadline.
