The Federal Trade Commission has filed its first two lawsuits under the Can-Spam Act, against two operations generating nearly one million complaints.
A complaint targeting Detroit-based Phoenix Avatar was developed in a joint investigation with the U.S. Attorney’s Office in Detroit and the U.S. Postal Inspection Service. At the request of the FTC, a U.S. District Court judge barred the illegal spamming and frozen the defendants’ assets. Federal criminal authorities yesterday executed a criminal search warrant and are in the process of arresting four principals in that case.
In the second case, the FTC filed a legal action against Global Web Promotions, a spam enterprise operating out of Australia and New Zealand.
Since Jan. 1, consumers have complained to the FTC about 490,000 spam messages linked to Phoenix Avatar and 399,000 messages for Global Web Promotions.
The FTC charged Phoenix Avatar and its Detroit-based principals with sending illegal spam to sell bogus diet patches. Consumers who wanted to purchase the products clicked on a hyperlink in the message and were connected to one of the defendants’ many Web sites. The agency alleges the defendants were earning nearly $100,000 per month from product sales.
The spammers hoped to obscure their identities by “spoofing,” using innocent third party e-mail addresses in the “reply-to” or “from” fields of their spam. The spam did not offer consumers the ability to opt-out of receiving future e-mail.
On April 28, federal criminal authorities executed a search warrant on a residence in West Bloomfield, MI, and arrested Christopher M. Chung and Mark M. Sadek. Arrest warrants are outstanding for defendants James Lin and Daniel J. Lin.
In the second case, the FTC filed legal charges against Global Web Promotions Pty Ltd., an Australian company the FTC alleges is responsible for massive amounts of spam in the United States. Global Web advertised a diet patch similar to Phoenix Avatar’s, and claimed its human growth hormone products “HGH” and “Natural HGH” could “maintain [a user’s] appearance and current biological age for the next 10 to 20 years,” according to the FTC, which alleged the claims are false.
In both cases, the FTC introduced as evidence thousands of examples of the defendants spoofing a wide array of victims, including AOL, Microsoft Network, and other companies and individuals.
The FTC charged Global Web Promotions Pty Ltd., Michael John Anthony Van Essen, and Lance Thomas Atkinson with violations of the FTC Act and the CAN-SPAM Act.
The Phoenix Avatar case named defendants Phoenix Avatar, LLC doing business as Avatar Nutrition, DJL, LLC; Daniel J. Lin; Mark M. Sadek; James Lin and Christopher M. Chung, doing business as A I T Herbal Marketing.
“The CAN SPAM Act bestowed upon the FTC and DOJ powerful new weapons in their arsenals to combat spam,”. “Today’s announcement shows that the federal government is focusing its attention and resources on finding and bringing cases against the kingpin spammers (both domestically and internationally) who defraud e-mail users, drain productivity, and generally wreak havoc across the Internet,” said Louis Mastria, director, public and international affairs for the DMA.
“But no one should hold the illusion that bringing legal cases against spammers is as easy as nabbing garden variety street-thugs,” Mastria added. “Spammers are notorious for exploiting the Internet to evade detection, and the complexity involved in these cases means that they will take time to build. However, no doubt they are coming down the pike, and we anticipate that in the months and years ahead, spammers will be spending more time behind bars than in peoples in-boxes.”
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