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Spam Government The Courts News

$1 Billion Awarded in Lawsuit Against Spammers 194

Posted by michael from the collecting-it-may-be-the-hard-part dept.
phoric writes "In what is believed the be the largest federal judgement in history against spammers, an ISP from eastern Iowa was awarded a $1 billion dollar judgement against three mass-mailing companies, which were said to be sending up to 10 million e-mail messages per day to the small internet provider."
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$1 Billion Awarded in Lawsuit Against Spammers More

$1 Billion Awarded in Lawsuit Against Spammers

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  • Why them, not me? (Score:4, Insightful)

    by elh_inny ( 557966 ) on Sunday December 19, 2004 @09:08AM (#11129455) Homepage Journal
    Will they share, after all I am a vicitm as well?
    • Yes but you haven't brought a suit against the spammers. And I believe under the CAN-SPAM act, you cannot anyway. I think only ISPs may sue. I have no idea if they are required to share the wealth.

    • Re:Why them, not me? (Score:3, Insightful)

      by eneville ( 745111 )
      The money _SHOULD_ go towards projects like Spamcop et al.

      As someone else just mentioned its the ISP who sues and wins, part of the money will go towards damages involved in catching the nasty people.

      The winning ISPs will probably now get a torrent of mail heading their way, which probably futher anoys their customers, but I bet they have tighter logging in place!
    • Comment removed based on user account deletion

  • Guarenteed? (Score:4, Insightful)

    by Renraku ( 518261 ) on Sunday December 19, 2004 @09:09AM (#11129457) Homepage
    I'll believe it when I see it. Spammers have a way of packing up and vanishing from the face of the earth over night.

    • Re:Guarenteed? (Score:2, Insightful)

      by Richie1984 ( 841487 )
      "We hope to recover at least his costs,'' Wallace said.
      I doubt that they'll ever see any of that money, but the ruling will perhaps put off people from getting into the spamming business. A $1 Billion fine is, after all, a major incentive not to flood networks with spam traffic.
      • I doubt they will collect and that is why this will not effect spam traffic. Since the defendants were not present at the trial, I wonder if they were even able to serve them with the summons and complaint. Unlesss we can actually track these guys down and then punish them, nothing will change. The real answer is going to be developing the technology to filter all of this out as soon as it comes into the pipeline.

        • Re:Guaranteed? (Score:5, Informative)

          by triclipse ( 702209 ) <slashdot AT combslaw DOT cc> on Sunday December 19, 2004 @10:55AM (#11129898) Homepage
          Minimum due process standards require that a person be served with a summons and complaint before a default judgment - or any other kind of judgment - can be entered against a party.

          Whether they were personally served or not is a different question. However, personal service is not required. They can even be "served" with the summons and complaint by publication in a newspaper if diligent attempts at personal service have been made.

          Lack of personal service may make it easier for them to set aside the default judgment, but I doubt they will show up in court to make the proper motions.

    • Good question. Now the problem becomes a matter of collection and identification of who actually has the money to pay this. They may have won. But until they can get the collection process started I question it's value.

      How many times have companies lost in a suit only to have the collection phase take 10-20 years, basically wearing down the suit winner into accepting a fraction of their due?

      The problem is you can't really put these people in jail until they pay up. IIRC that's referred to as debtors p

      • you can however fuckup their credit real good, so they will never ever be able to get any loans or credit or anything from ANYONE.

        send a copy of the judgement to anyone doing business with them.

        basically you can make it really hard for them to do business with anyone ever again, until they pay off their judgement.

        keep in mind a fraction of a billion dollars is still quite a lot of money. i'm sure collection agencies will go wild over that amount.
        • No, according to some mails I got recently, you can get cheap loans even without a good credit history.

          Sending a copy of the judgement to anyone doing business with them implies that people who pay spammers would not see that as a glowing testimony. Are you serious about that?

      • Re:Guarenteed? (Score:3, Interesting)

        by dattaway ( 3088 )
        But until they can get the collection process started I question it's value.

        I'm sure there is no shortage for offers of "insurance" that they will get the money. Many speculators with money would like to gamble and say, "we'll give you 1,000,000 in cash now if you sign over all the rights to the settlement to us." And like a bondsman, they will go after the spammer with millions of dollars worth of paid goons to collect. With a price like that on the spammer's head, there's no escape in this small world

      • So sell the debt on. (Score:3, Interesting)

        by anticypher ( 48312 )
        There are collection agencies out there who will pursue judgements against defendents who lose court cases. In this case, the ISP can identify the person or people behind each company with the help of ROKSO, spamhaus, and friends. He can then get the judgement directly named against them, then sell the judgement on. Collection agencies are bottom feeding scum, just like spammers, so they'll have no problem in mucking around the trailer parks of south florida.

        Collection agencies will keep a percentage of
    • I'll believe it when I see it. Spammers have a way of packing up and vanishing from the face of the earth over night.

      Damn, I knew that Nigerian guy wasn't from Nigeria.

  • yay! (Score:2, Insightful)

    by northcat ( 827059 )
    Now this is how it is supposed to be done. Make them pay monetarily. If you send them to jail they'll just come out after a few years and enjoy their money. (They'll even enjoy getting ass-raped)

    • Re:yay! (Score:2, Insightful)

      by MrRTFM ( 740877 ) *
      Now this is how it is supposed to be done. Make them pay monetarily.

      It has always puzzled me that crimes where the criminals make lots of profit, somehow get to keep that profit when they get caught and go to jail.

      Surely a better deterent would be - you lose *all* the gross money you made from this illegal venture PLUS 50% (or $25,000 - which ever is more).

      But then IANAL although if there are any lawyers out there, I'd love to know the reasoning why this cannot happen.

  • Wow (Score:5, Interesting)

    by Stevyn ( 691306 ) on Sunday December 19, 2004 @09:14AM (#11129474)
    Kramer is unlikely to ever collect the large judgment, which was made possible through an Iowa law that allows plaintiffs to claim damages of $10 per spam message, said his attorney, Kelly O. Wallace of Atlanta.

    That's a lot of money per email. When I saw the headline, I figured most of the money came from putative damages, but the article didn't mention it. Instead they were able to claim the amount from actual damages. This leads me to think that this law might not stick around for a while. It was also interesting that no lawyers were present for the trial.

    • It was also interesting that no lawyers were present for the trial.

      You forgot the word Defense.

      Since the defence didn't show up, there was a default judgement. It's the same as not showing up to fight a traffic ticket. Only in this case the fine was $10. They just managed to rack up a whole slew of violations at $10 each then not show up to defend themselves.
    • What is the point of a law like this anyway? Why not leave it up to the courts to calculate this stuff on a case by case basis?
      • If the courts has to calculate this everytime they have to use time, alot of time on the calculation, and the spammer will reject the damage numbers from the ISP, and the court has to spend more time.
        Having a fixed number is much easier.
        • If the courts has to calculate this everytime they have to use time, alot of time on the calculation

          That's what case law is about. Courts set precedents and other courts tend to follow them with departure on a case by case basis.

          It just doesn't make sense for legislators to dive into this sort of detail.

    • It was also interesting that no lawyers were present for the trial.

      The spammers weren't present either, apparently. Now in order to collect this money, the poor guy [cic.net] has to go find the spammers. And they are probably just arriving in New Zealand right about now...

    • "I figured most of the money came from putative damages...."

      I've seen lots of people use this term, which doesn't actually exist in this context. The word you are looking for is punative as in "punish", which is what this type of judgement is meant to do.

      The U.S. court system is a complete joke to spammers, though. The effect these unenforceable judgements have is more humorous than anything else.
    • I read an article on this in an Iowa newspaper yesterday. I seem to remember reading that the judgement was 1) for millions in damages, and then tripled for punative reasons, which then took the total over 1 billion, and 2) narrowed down from (approx) 56 "john doe" defendants to only three specific dependants. I don't remember reading this exactly, but I got the impression that the other john does were too hard to track down to actual people.

      Also, there was a reason the punative damages were added, over

  • Imagine (Score:3, Funny)

    by jstrain ( 648252 ) on Sunday December 19, 2004 @09:15AM (#11129477)
    all the V14GR4, fake Rolex watches, and mortgage refinances he can buy now!

  • Okay, but now let's look at the big picture (Score:3, Insightful)

    by davmoo ( 63521 ) on Sunday December 19, 2004 @09:15AM (#11129478)
    This ruling is good.

    But for every spammer eliminated, 5 more pop up to take their place. And the new ones are popping up outside the US, where US court rulings don't matter.

    Nothing will change in the long run until the email protocols are changed to prevent spoofing and such.
    • Lots of little spammers pop up, but those are easier to deal with. These three were from near the top of the spammer "food" chain. ($700M against Amp Dollar aka ROKSO listed Daniel Walls is a spam partner/accomplice of Alan Ralsky.) That and that RICO was used has got to be worrying to all the kings, queens, princes and popes of spam.

      A lot of spam might come from outside the US, but it's usually at the direction of people in the US. (I'll bet that these people used a lot of out-sourced web sites in China a

    • Nonsense. 90% of the big-time spammers are, and always have been, from the USA. Most of the actual spam is sent from somewhere else, but if you eliminate the spammers, the spam will vanish as well.

      And while there are people outside the US who are spammers, the ratio is far, far less. Europe has as many if not more people online than the US, but last I checked there were 2 europeans in the top 20 spammers list.

      I figure it's a culture thing. We over here simply know and understand that spamming is just wron
      • I figure it's a culture thing. We over here simply know and understand that spamming is just wrong.

        I don't know if I buy that. People are people and engage in profitable criminal activity everywhere it is possible - an explanation that makes more sense to me is that Internet access is more tightly controlled in Europe than in the US. Every American spammer has probably burned through dozens of ISPs and incorporations - I get the impression that such behavior would be nearly impossible in much of Europ

        • People are people

          Really? How come that 500 years ago, the church had more power than any king? How is it possible that 2000 years ago, slavery was a totally normal thing? Why is being rude a serious offense in Japan, and somehow "cool" in the west?

          People are different depending on the culture they are surrounded by.

          Internet access is more tightly controlled in Europe than in the US.

          That would be news to me, and I work for a european ISP.

          Every American spammer has probably burned through dozens of
          • Really? How come that 500 years ago, the church had more power than any king? How is it possible that 2000 years ago, slavery was a totally normal thing? Why is being rude a serious offense in Japan, and somehow "cool" in the west?

            Of course people are shaped by their experience as a child and the cultural norms - but some things are constant, they may be expressed differently in the local culture but the constants don't change.

        • Over here ISPs talk to each other, so if you get banned for spamming in one you're going to find it real hard to get another one.

          Do it twice and you might as well forget having an internet connection.

          It helps that there aren't that many ISPs really - most of the ones that advertise are just resellers for one of the biggies.
    • These damages must be made enforceable against the beneficiaries of the spam.

      For instance, for the Viagra spams, Pfizer has enough to cover the award in this case.

      Having to spend a billion (or at least a million in attorney's fees fighting it) should make them a little more picky about who distributes their pills.

  • Whip them! (Score:2, Funny)

    by mousse-man ( 632412 )
    They should rather have the spammers flogged to the tune of one million whiplashes.

    Much more effective. They can't pay the fine anyway, but they still feel the pain until they're a bloody mess.

  • Grrrr! (Score:2, Funny)

    by Israfels ( 730298 )
    Great, yet another reason that good old fashion American spamming companies are going to be outsourced to India.

  • Sadly.... (Score:4, Funny)

    by ralinx ( 305484 ) <ralinx@gmail.com> on Sunday December 19, 2004 @09:29AM (#11129519)
    ...the ISP was contacted about the money through an email with the subject "YOU HAVE JUST WON 1 BILLION DOLLARS!!!" which they obviously deleted, and now they can't receive their money.

  • $1 billion--wowzers! (Score:5, Funny)

    by Ph33r th3 g(O)at ( 592622 ) on Sunday December 19, 2004 @09:35AM (#11129546)
    Based on current advertised prices (rounded to nearest unit, exclusive of shipping and handling), that's:

  • Sting? (Score:5, Interesting)

    by tomstdenis ( 446163 ) <tomstdenis@gma[ ]com ['il.' in gap]> on Sunday December 19, 2004 @09:37AM (#11129551) Homepage
    Why not just work with credit card merchants. Many of these spams are for crap you can buy with a credit card.

    So have police [or a taskforce] use specially marked cards [that otherwise appear like a credit card to the spammer]. Then when the merchant puts the transaction through their details are sent back to the task force.

    e.g.

    1. Get spam
    2. Go there, buy shit
    3. They try to collect with merchant
    4. They then get a knock on the door a day later from the FBI or something.

    Spammers already don't accept money orders and cheques [for obvious reasons] so let's make them afraid of credit cards as well.

    And before anyone thinks this is entrapment step #1 takes care of that. They're selling to you without solicitation. ...

    Aside from that I also really don't understand why spammers spam. I mean I don't know what a r0llex is, can't use any v1@gra and really can't afford a hom3 l0@n at the moment. So why bother emailing me over and over and over again.

    I'm sure if I wanted herbal penis meds I'd already be in business transaction with the spammer anyways.

    Oh well, can always just stop using email I guess.

    Tom

    • Re:Sting? I tried it ... (Score:5, Interesting)

      by triclipse ( 702209 ) <slashdot AT combslaw DOT cc> on Sunday December 19, 2004 @11:31AM (#11130106) Homepage
      I did something similar to this, but put no money out. I responded to one of those mortgage emails (the subject line had something like "We owe you $60001" and went on to say something like, "Your mortgage application is approved, click here for final details ..." I am confident you have seen this species of spam once or twice :-)

      I followed the link and put in a fake name - a name I have never used anywhere else - but provided them with my real office phone number. Because it dealt with mortgages, I knew someone who had sufficient ties to my jurisdiction would respond if they wanted to sell me a mortgage.

      I had over 40 fricking banks and mortgage brokers call me using that fake name! So what did I do? I sued the bastards.

      Now, whether or not I believe them when they say that they didn't know that their leads were generated by spam, the judge in this particular case (who didn't know very much at all about the technology or economics of spam) said that, as a matter of law, they were not liable under my state's spam laws. However, before they were dismissed from the case, I was able, through discovery, to learn where they purchased those leads. So although I have dismissed the banks and brokers, I have named as defendants the companies who sold them the leads (which, I was surprised to learn, were also in my jurisdiction). My plan is to trace that fake name all the way back to the company that first sold it to somebody else.

      In seeing how much money these banks and brokers pay for leads, it is understandable why spammers take the risk of a judgment such as the one in this Iowa case - they are making money hand over fist!

    • "Following the money" would be a great investigative technique, whether single-instance to get the person running a particular spam business, or, as the FBI has done with organized crime, mapping out the entire business enterprise and then taking it all down at once.

      The RICO statutes used for organized crime ought to be used for spamming as well. I can only believe that banks and other financial instutions are willing agents in the spam trade, as are ISPs and other nominally legitimate businesses.

      A RICO
  • At least that affirmation from spammers have some good basement now,

    If individuals can't sue big spamming companies, something like a class action lawsuit could give us (well, you, im not us citizen) another $1b?

    • "If individuals can't sue big spamming companies, something like a class action lawsuit could give us (well, you, im not us citizen) another $1b?"

      But come on - how much of that billion will actually be paid? I doubt however rich the spammers are they ever came close to that figure from the products they were selling. The least the judgement does is act as a warning other spammers (not that it'll do that, because I suspect a vast number of spammers live outside the US), and at best the ISP will see a little

  • more needs to be done (Score:3, Insightful)

    by harryoyster ( 814652 ) on Sunday December 19, 2004 @10:30AM (#11129785) Homepage
    The real problem is that more people need to make a bigger effort against spam. The US fines and stuff imposed on spammers doesnt really make that much of a difference to SPAM world wide. The majority of my spam is now non-us based for the first time in years. What can we do.. stop routing to those ISPs that have problems. revoke entire ranges of IPs. it will work.. make everyone on that ISP suffer will make the ISP change thier policy very very fast.
    • So once we've got this system in place to just "turn off" huge ranges of IP for entire countries, who gets to decide when the system gets used? Congress? The president? Somebody with, say, an agenda? Who gets to push the magic "China disappears from teh interweb" button?

      The real problem isn't that people need to make a bigger effort against spam. The problem is the spammers. The problem is that there's people out there that view what they're doing as OK. It's not OUR fault for not policing one another more

  • Florida bankruptcy laws? (Score:4, Insightful)

    by AndroidCat ( 229562 ) on Sunday December 19, 2004 @10:37AM (#11129816) Homepage
    Some of these spammers were in Florida, and I know that Florida has laws that let you keep large personal assets like houses even in bankruptcy. (Strange how many scam artists move to Florida.) Does it matter that the judgement was from a federal court?

    The question is probably moot since the spammers vanished before the case started. (They didn't didn't even send lawyers to the court.)

    • There are some laws here in Florida that protect homes from confiscation (a homestead law). From what I understand of it, it only pertains to liens from within Florida, not a Federal lien. I'm going to do some more checking and read the laws to see how it may or may not pertain to this ruling. Let's hope Ralsky joins the ranks of the homeless, and soon :)
    • Doing a little checking, I found this:

      For example, even Florida's homestead protections cannot avoid a lien placed on the house related to criminal or egregious activity. Secondly, federal agencies have unlimited resources to attack lawyers who attempt to deceive the agency or collaborate with targets of their investigations. Targets of federal civil or regulatory agencies are "toxic clients". Its not worth it. From: Florida asset protection [blogs.com] It may just be that the Feds could take whatever they own, rega
    • Here's another item I missed from the same site:

      A prospective client called and asked whether the Florida homestead protection extends to IRS debts where the IRS debt pertains to one of the two spouses who own the homestead. While Florida's homestead is a broad and strong asset protection shield, it does not offer full protection against IRS taxes. The IRS can put a lien on homestead property to collect taxes. While the IRS cannot force a sale of the residence to collect taxes, the tax lien would remain
    • According to one of the links the judgements are against the spamming companies. Unless someone pierces the corporate veil here (which is quite possible), the individuals won't even notice.
  • Although I think all spammers should be hanged by their balls and it's good to bankrupt them all, I do have some problem with the amount of money that people claim in the American justice system. Next thing you know people will sue because a song contains dirty language.

    Oh wait [forbes.com]...

    Merry X-mas to all the lawyers.

  • If they cant collect the judgement. Can they take it off their taxes as a loss?

  • $1 billion vs $2.6 million (Score:4, Insightful)

    by jmcmunn ( 307798 ) on Sunday December 19, 2004 @11:18AM (#11130026)

    Ok, so the spammers have to pay $1 billion for what they did. On the other hand Diebold only had to pay $2.6 million for writing bad voting software that potentially ruined the future of the country by allowing for voting results to be hacked?

    There's something wrong with the way our legal system works, and more importantly this shows that people don't value their right to vote nearly enough. Spam seems so terrible to people because it annoys them on a daily basis, and yet no one is up in arms about their freedom to vote being insecure.

    Come on people get the priorities straight...afterall there's decent antispam software out there, and even a small ISP can block people from sending spam through their servers if they are properly patched and up to date on security realeses. Damn, I only wish some spammers would take advantage of any holes I have now, then I could sue and be rich forever.
    • Diebold contested the case, the spammers did not.

    • Ok, so the spammers have to pay $1 billion for what they did. On the other hand Diebold only had to pay $2.6 million for writing bad voting software that potentially ruined the future of the country by allowing for voting results to be hacked?

      I believe the difference lies in the intent. Unless you're the tinfoil hat wearing type, problems with voting machines could be seen as a most likely stemming from honest mistakes in code. As it's a generally accepted fact that it is nearly impossible to rid comple

  • I run my own mail server (Score:3, Interesting)

    by codepunk ( 167897 ) on Sunday December 19, 2004 @12:04PM (#11130272)
    I run my own mail server, so am I a ISP? Can I
    sue these bastards for using my bandwith sending me unsolicited crap. What is the definition of ISP in reguards the the can spam act?

  • There was no immediate reply to an e-mail sent to Cash Link Systems on Saturday.

    Congratulations! Your e-mail adderss has just been harvested, Mr. Associated Press reporter. I am sure that the "replies" will start pouring in, presently . . .

  • When I submitted this news item last night (rejected, of course), I had posted a related link. Apparently Ralsky is also in trouble with the Securities and Exchange Commission regarding a fraud scheme [sec.gov] .
  • The local (Clinton, Iowa) paper had more information here [clintonherald.com]. Key quote:

    CIS stated in the lawsuit that the defendants sent the spam to CIS e-mail addresses that were found on a CD-ROM titled "Bulk Mailing 4 Dummies. The court documents stated that CD-ROM included a list of more than 2.8 million e-mail addresses with the "cis.net" domain. Nearly all these addresses are fictitious, have never been assigned to a CIS subscriber and have never been used, except entered on the list included on the CD-ROM. Kramer

  • I'd really like to see these spammers be forced to pay what small fraction of the damages they can afford. It seems like tracking them down and handing over their information to the complainant could be accomplished a lot faster with a "distributed investigative" approach. That is, a lot of people across the Internet bring what small part of the picture they can, and combined, the identity of the perpetrators can be determined.

    Who knows, maybe out of the damages could come a "finder's fee" as a donation
    • It's fairly simple to track down spammers. Open a credit card account to purchase spammed products, then when the statement arrives, trace the money to whatever account received the money.
  • That one billion sounds good ... but what do you think it will get reduced to upon appeal?
  • I haven't studied the problem in detail yet, but I think there may be a relatively straightforward mechanism to allow UCE senders to pay their fair share of the cost of the net, and to institute some real economic feedback into their business equation. If I were an ISP or backbone provider such as AOL or Earthlink or Level 3, I might lobby for a change in the law - at least at first glance.

    At present, the cost of shipping data around the net is basically shared equally by senders and receivers of data. H
  • Spam is changing, and in ways that indicate the end of the beginning may be in sight.

    First, spam from "legitimate" companies is dead. If you don't lie in the headers, you get filtered out, and if you do lie, CAN-SPAM gets you. So it's a total lose for any company with a real, physical address.

    As a result, political pressure for weak spam laws is decreasing. The "legitimate" players can't make any money with it. This offers the opportunity for better legislation next time around.

    Spam is becoming a

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